 Great. Well welcome everyone. My name is Rich Lesser. I'm the CEO of the Boston Consulting Group and it's a real pleasure to be with you here this morning. If you if you saw the crowds outside you realized that this was quite a hot ticket and what I learned yesterday was that this was the second most oversubscribed panel. So now you may be thinking you know with this amazing group of panelists up here and with a topic like digital transformation how can it not be number one? And and the answer is that just like in his TV show House of Cards Kevin Spacey is used to finding a way to winning and and so Kevin is the most requested session. Fortunately he didn't have to throw any of us under a train to achieve to achieve that status. In all seriousness since I was with you since I was here in Davos a year ago I've been in 30 countries around the world and I've talked to a couple hundred CEOs and the topic we're about to talk about now is the most consistent topic that comes up in the conversation more than the geopolitics we'll hear about more than any other single topic and and what we see in these discussions and frankly in the work we're doing is that there's three broad angles on this that companies around the world and across industries are wrestling with. The first is how they rewire themselves how they rewire themselves to be able to take advantage of a digital cloud based mobile oriented world and how they leverage advanced technologies whether it's robotics or AI inside inside their operations. So it's their own internal changes. The second is how they how they leverage the massive amounts of data out there and really be able to bring advanced analytics into their business and not just bring it in an algorithmic sense but bring it in a human sense the people that have the capacity to use it the processes and the clock speeds that they need to operate at. And then the third is how they use this digital world as a source of innovation for their customers how they design new products new services and in some cases whole new businesses that they can that they can generate to drive growth in a world where growth is increasingly hard to find and and so this panel today is a fantastic group of people to give us five windows into how they see the world of digital transformation and their environments and for several of them and how they are interacting with with their customers right now. This let me quickly introduce them I'll just go left to right. Meg Whitman is the chairman and CEO of HP Enterprises the new the part of HP that shall be running Bernard. Bernard Tyson is the chairman and CEO of Kaiser Permanente one of the leading integrated health providers in the U.S. Klaus Kainfeld is the chairman and CEO of Alcoa. Jean Pascal Chiquar is the chairman and CEO of Schneider Electric and Mark Benioff is is the founder and chairman and CEO of Salesforce.com so we just have this wonderful group of panelists up here we thought we would do this conversation in three blocks I think the first is just to have a conversation about what digital transformation means to these leaders in the context of their businesses and what are the big bets that they're taking every CEO is trying to incrementally improve their operations in many areas but what are the really big things that that they're doing and to really move the needle in the years ahead the second block we'll talk about is how do you make that happen inside the institution how do you become a digital culture and how do you think about all the changes that they need to happen in some cases even in the company structure but certainly when it comes to organization leadership skills information platforms that need to be created and so what are the enablers to moving to a digital culture and then the third is we want to leave some time for the questions that are on your mind the things that you want to raise with the group so we'll leave a few minutes at the end to do that this is a live stream discussion so it's being being broadcast others I think therefore this is not a world where Chatham house rules apply and at the same time we I want to encourage candor and and and also I've as I've told our panelists we want to we want to have a conversation so people want to jump in disagree with each other build on each other we'll try to make it free flowing class I thought I would start with you sitting in the middle there which is you know alcoa is a classic you know industrial leader in the metals world over you know a century old and yet digital transformation I imagine three years ago it would have never been thought that you'd even be sitting here on a digital transformation panel and I and I just could you share how you've thought about digital transition in the context of alcoa and and where the big priorities from your end yes so it's very relevant for us I actually think it's very relevant for everybody and who believes it's not relevant hasn't really thought about it so far I mean to give you a little glimpse into into where this plays I mean the there's a revolutionary change going on and 3d 3d printing for us as a metals company it's all about metals 3d printing and and we are catering to the aerospace industry to automotive industry and this is very this changes the way things get done you know we have developed a lot of technology around it and we are investing not just into the manufacturing part but also into the powder because the powder is like the ink to to metals right and here you're talking about regulated markets that where it's very very important that you have a quality of powder that that a piece that's uniquely made you know is identical to the other piece that's uniquely made so it's a challenge for the regulators who are currently investing in building a power powder plant that has three chambers outside of outside of outside of Pittsburgh so it's one big bad you know another big bad it comes with the total revolution on sensing you know sensors used to be I mean very expensive I mean just really great sensors today it's cheap dirt cheap we carry this around I mean optical sensors are at every camera with a resolution that was unthought of auto audio logical sensors microphones all this is allowing you to do things that were not possible before so this has relevance in two aspects one is we can re-equip our current equipment and get many many more data the moment you have the data you can do diagnostics and the moment you have diagnostics you can optimize so this is irrelevant throughout the system whether it's upstream midstream or downstream but it's also relevant for another big bet that we've come out in December last year which is called the micro mill technology micro mill is a revolutionary process that allows us to roll from the hot face into a cold roll in 20 minutes something that today takes 20 days right and the the to have a process like this as you can easily imagine requires a precision that was not possible before with this precision you actually get a material out there that was not that nobody could produce before so in reality you always were to say you trade off formability to two strengths you trade off strengths to weight today we can make material that has all of these three dimensions and optimizes that these things all together so this is really this is really what's going on there the biggest challenge and I assume we're gonna have another debate around this for for a company that's big and and and has a strong tradition is how do you make sure that everybody feels that there's a real revolutionary going on and and the way the way I'm talking about it be a little bit more shumpeter you know to encourage people to have this gene of constructive destruction you know but maybe that's something for for the next round and can you just it feels like between 3d printing on the one hand micro mills on the other the whole concept of the supply chain the way you've envisioned you know historic has been envisioned is is going out the window and and how do you think of supply when a business that's built around a supply chain that goes back decades and decades I would say everything is at question I mean so for instance I mean take a jet engine you know of it obviously sophisticated part always what's specific part the way this work before if you if you were to design a new jet engine you had to you build a model okay we will do a modeling together with the OEMs you know so but then you had to decide when you wanted to put it into a test bed if you wanted to have a piece mate you would have to basically decide on one of the alternatives and then you decide this is the alternative piece I make it now I order the tooling the tooling takes 18 to 24 months and cost a lot of money then you have this one piece put it into your test machine then you test it right today the processor today and today actually for us was already two years ago because we had invested in that we do it we basically are able to indirect to do it 3d printing indirect you know so so we did it out of polymer and then cast it from the polymer into the real piece in basically two weeks so you now you know now don't have to invest into the tooling when you get it in two weeks so now the costs are down the time is substantially down so you can say I want to have three of those and then I can have the three actual pieces in metal fully functioning pieces that you put into your test bed and by this you can now find out does my test bed and the simulation is that close enough to the reality right so you you're improving on two dimensions so that's one one example you can also now make pieces with this that technology wise you would not be able to make before because there's no casting technology that would for instance allow you to have a hollow structure in that particular spot and the hollow structure that you would want to have air air air flowing through so that you can run this I mean in the in the jet engine it's all about temperature so you want to run it it's already running at a temperature that's be higher than the melting point and the only reason why it doesn't melt is because you build in cooling structures with air compressed air so that it can run faster you know and and stand stand a bigger heat this is stuff that that goes straight to the advantage of customers because you get a higher fuel efficiency and you get a lower emission if you can get things done so in reality it puts a lot of things at question almost I I think you almost have to say you put everything at question which brings it back to the question of how can you get your team thinking about this I mean I think the biggest limiting factor today is not technology anymore it's the it's the humans in an organization that's not used to question great and Jean Pascal while we're in the industrial world in in energy solutions and automation you've really been an industrial powerhouse for quite a long time can you share how you see the digital transformation in in your environment and you're part of the industrial world well first I'm very excited that Klaus has a problem of power quality because I'm sure I can help him so probably I didn't lose my time by being sitting close to him this time so but really this is what this is what friendship looks like all right let's not go into stereotypes but when when let's go for our world which is a world of energy and automation digitization carries huge implications so it's we operate around the world with many partners integrators and we have used from the beginning I would say we've been early adopters of the platform of mark of Salesforce to organize that so I won't speak too much about that because I see mark does it much better than I do but now when you look at energy and you think about it invented more than one century ago very much I load generation transmission and distribution on consumption demand as we call it on all of these very being very discoordinated on massive inefficiencies so 60 percent of everything we do buildings factories homes are consuming energy 60 50 percent more than they should a grid is used at less than 50 percent of its capacity an electrical grid more than 50 percent of the time if I would run my factories I this you would you would you would really be mad at me so what is happening today that we are connecting all of this from plan to plug everything connected to the internet so that it generates all the adaptation on all the efficiencies around around around the line connectivity is not new for us we started to connect things to the internet in 95 but the new new things is that now we connect those micro systems smart building smart grid together so that they can adapt together so in a nutshell all products will be connected all that data is getting aggregated on analytics we deploy analytics to automate or to support decisions so speak about the implications on our company in 10 years we had to develop to reconvert our nd so that now our nd is a 60 percent software on electronics on that a lot of a lot of people as software which is the other world of analytics our different culture we set up an autonomous division business inside schneider which is serving schneider itself but which is serving third-party people second point which he changed dramatically for us is the nature of the relationship with the customers we are coming from a relationship which was projects on service on demand right you have a problem of power quality I come to help you now it's we stay connected 24 seven so that means we can bring new values new capabilities and we can bring a lot of new service and I'll come back to that third point we are working with partners and there are a lot of business and we are still and we want to keep working with partners a lot of business which are based on intermediation so you are kind of a wall between a customer and on the supplier you bring more value and you make money of that and those words tended to be divided now because it's digital we share and on that that I share and everybody's bringing the right value to that so it's opening a new way of working with our partners and needless to say when we went into digitization we knew connectivity we knew software but when you go into the cloud you can't do everything alone on the big thing for me is that this world is really prone to a lot of partnerships so the big bets you have to do is really to choose your the right partners on really your success is depending on you but also on the ecosystem you are choosing but the biggest change in our industry is has been our positioning so you are coming to see us for safety and reliability quality on on no worries you can still come for that I mean we still deliver the best reliability quality no fires no repercussion no harm to to people and to to goods but our customers because it's digital call us to energy optimization process optimization predictive maintenance asset management which are coming natively as a byproduct of those systems now when you are companies that were selling products with the first characteristics and that you have to go into that form of consulting think about the whole reconversion that you have to do with your sales force you don't speak to the same people in the company so that has that's a very exciting we've been 20 years in the in the journey but it's been really creating new value to our company can actually one follow up I spent a lot of time personally working with r&d organizations over the years and transforming r&d is actually quite a challenge because people are very committed and very smart but they get very deep skill sets they're technically deep and it's hard to get them sometimes to see the world from a different angle you talk to conservative conservative well innovative but but in the way they know how to do it you know what I mean they have a way of doing it and and so you talked about now moving to I think you said 60% r&d is sort of software related probably very different skills than the way you traditionally recruited for r&d how have you made that transition really happen in r&d and how do you see the you know making that work well some people make happily the journey and actually they find it very exciting second we have acquired third we have created a venture capital fund that affiliates us with number of startups and things so that they inspire us and we create things create things together on the other conclusion that when you have to do big conversion service you have to to take people from the outside but just just fewer it changes fundamentally your way to develop products I mean in the world of before you make a spec you spend two or three years in the tunnel of development now you go fast on the market with a with a minimum viable product and then you can upload download software to bring more functionalities so that you are much faster testing the functionality with a with a customer and much faster adapting the product to your customer needs so it's not only changing what you do but it's a lot about changing the way you do it great bernard I've been hearing for years about how Kaiser had been such a leader in integrating it and bringing different parts of the value chain together in health care provision but of course digital transformations hitting this world in a big way too how do you see your digital transformation priorities now in the context of the enormous leadership role that kaiser's historically had in sort of the the IT environment in health care great thanks and it's really great to be here with this esteemed panel it's a great question and of course when you talk to me about this I say yeah I would love to talk about it because we're we're knee deep in our transformation within within Kaiser Permanente fortunately we've embraced technology as part of the history of our organization which has been somewhat unique in the health care industry and so there's almost a natural but I would tell you the change now with digital transformation is dramatic even inside of our organization so right quick if you think about the health care industry we pretty much have enjoyed the luxury of forcing everybody to come to us for everything that you need we built the health care industry on two legs one a fixed me system pretty much people get sick and then you come to see us and number two we designed it around how we want it to do everything so it was provider built and to our convenience in many cases we're deploying a strategy in Kaiser Permanente of what I call care anywhere that we're challenging that whole notion that people have to come in for everything that they need and the digital platform has allowed us to both prove that theory as true and to enhance the value that our members see in Kaiser Permanente case in point we introduced e-visits and we started with the mobile phone and with the computer your ability to have a secure office visit with your doctor with your provider directly last year we did something like 26 million e-visits members love it on a scale of one to ten is something like nine point something satisfaction extremely high additional access into the organization never have to leave your home never have to leave your office never have to leave wherever you are for something that is appropriate that could be taken care of with a virtual visit we're now building on that telehealth where now the visual becomes important in particular between the interaction between the patient and the physician and so I expect that that's going to take off just like the first generation of what we were doing as well inside of the organization it has created both incredible possibilities as well as incredible fears and challenges all the way from the life of a physician has changed dramatically inside of our organization because now like some of us in the other side of the world we've been doing this for a long time always on and this has been a cultural challenge for some of our providers the second one is it is true I've come to learn that actually people do pay attention to what the CEO is saying and what what I have discovered big shock and what I have discovered is what I have learned in terms of feedback from the organization is that I'm heavy on the technology I fully embrace it I'm building a whole digital platform I have strategic partners I'm into it what I'm hearing back from the organization is what you've excluded from your communication is our role in that and our role in the future of this organization and it was a aha moment for me because I just assumed everybody would know that we still need people to take care of people and I've discovered that people have started to look at is this replacing all of us in theory or is in fact this is helping to enable us to be more effective in taking care of millions of people wonderful Meg HPE is at the forefront of many of the technologies we're talking about around the cloud predictive algorithms big data and analytics and how do you see these technologies changing and what it means for companies to really go digital right now well first of all thank you for having me this is a great privilege to be here we do have a unique position because we have had to digitally transform a 75 year old company just like the organizations many of you run while at the same time we are one of the partners that people choose to help them digitally transform and what's driving this really is two things in my view it is every one of you is trying to figure out how do you take your organization and make it even more competitive so that you win in the marketplace whether you're Kaiser or anyone else over the next five years the other thing that has changed which I bet everyone can relate to is speed my view is the future belongs to the fast if you can't get your organization to accelerate at dramatic speed their ability to develop the technology that will allow you to win almost by definition you are falling behind the other big change is that business strategy is now completely one in the same with it strategy and I thought Bernard you said it very well there is no business strategy with what it without the it underpinnings that is going to allow you to win in the marketplace and virtually every major company has a problem they have an existing quite rigid not very cost effective slow legacy it environment that's been built up over anywhere from 10 to 50 years and every organization knows they have to move from where they are to where they must be and so how do you balance the needs of your existing IT infrastructure that runs your business runs your supply chain while at the same time you move to a new environment and so what I think this is driving is organizational change but perhaps more than that every CIO every CEO has to have a plan and how where are you today and in three or four years where are you going to be what are the milestones and what's the business case for getting it done because what I also know is there's not usually big incremental budgets for IT spent in fact I bet most of you are trying to figure out how to spend less on IT while you move to the new world order so it's investing in some very basic things like automation and orchestration you would be surprised how many organizations are not fully automated not fully orchestrated and there's a 20 or 30 savings off the top right there virtualization many companies are not fully virtualized movement to the cloud some folks have started with very small applications in the cloud how you get to the cloud as fast as humanly possible whether on premise or someone else's cloud and how you pick the applications that you're going to drive for your organization the key to this whole thing is workloads so you've got maybe 2700 workloads or applications in your organization what do you want to keep locked down in your data center untouched by anyone else except for your employees what do you want to move to a private cloud on premise what would you be willing to move to a managed cloud or a virtual private cloud or a public cloud and then what applications do you never want to see anything in your environment you just want to buy that application that lives in the cloud like Salesforce and that is the whole key to transform transforming your digital environment is where are the applications going to live and then lastly and I'm sure we'll talk about this is there is also a big business model change happening IT used to be bought on a CapEx basis today increasingly the world is moving to a consumption model and so you can move CapEx to OpEx and then you partner with companies who can actually help you do that if you're a Salesforce that's a OpEx model from the beginning but your your traditional environment can be bought on a consumption based model which for many many companies makes the ability to finance this digital transformation incredibly important and doable so and then of course there's the thing I think we'll talk about last which is culture in many ways and you think this will be interesting to you running a technology company the technology is actually the easy part getting the organization to move to adopt the new technology and the new way of doing business and the new business models is really in many ways the toughest component and we have had experience internally at HP when we don't manage the process of change as effectively as we manage the technology change actually the projects are not as successful as they would otherwise might be and for those of you who are technologists like Bernard you know everyone wants to blame the technologists often it is the culture change that hasn't had the right attention paid to it excellent so I want to come back exactly to that but I want to first mark just ask you you've been working essentially for with many hundreds of companies now around their digital transformation journeys and just to share your perspective on you know where do you see the world moving in terms of the priorities and where companies need to be taking the big bets right now well I think thanks rich and thanks for putting together this panel you know number one I think everybody got this great book from claus Schwab the fourth industrial revolution and if you haven't had a chance to read that book I mean that's I think a great place to start and kind of map your current company against that and I think what you'll find when you do that is the fourth industrial revolution starts with one very important point which is trust that is you're about to define a new level of trust between yourself and your employees between yourself and your customers between yourself and your key stakeholders shareholders as Jean Pascal said between yourself and your partners and this is a cultural revolution for organizations that are not built on trust because when we talk about trust when we talk about growth when we talk about innovation we have to talk about it in that order that's number one you know it kind of I was thinking about how do I explain it and then this morning of course I woke up at 5 a.m. because I never sleep in Davos and I went down to the gym and of course what do I find of course my friend Nereo I see him sitting in the back row would you just wave this Nereo is the CEO of Techno Gym and he is you know has all this amazing new equipment and it's all connected now and I have to put in my information and you know it's a big internet of things and his bikes are connected and the elliptical trainers are connected and the treadmills are connected and he knows who I am and he knows how much I'm working out he's got all my biometrics and it's not just about a B2C situation because he's also a B2B company that is he's selling to the hotels he's selling to the fitness centers and he's building this kind of collaborative social network so it's about mobility it's about collaboration it's about of course the cloud because now he has a big Techno Gym cloud but at the end of the day I'm only going to use those bikes and I'm only going to register with that network and I'm only going to get involved in Nereo if I trust him and of course I trust him because I met him here you know many years ago and but as a customer of his I better be ready to a new level of trust because the types of access the types of information the types of data the level of privacy that we are talking about it doesn't matter if you're HP or Kaiser or Alcoa or Schneider Electric all of these companies are going online all of these companies are connected in a whole new way and they're connected to their customers in a whole new way they all have incredible stories about how this fourth industrial revolution has transformed them not only now but where they see they where they want to be 10 years from now but I guarantee you that in each and every one of these stories it begins with the transformation of trust in their enterprise and that's the hard part employees better realize customers aren't going to use your products in the fourth industrial revolution unless they trust you this is a big change it's very interesting you said that because this morning I was at a breakfast that Richard Edelman hosts every year on trust and the thing that their trust barometer shows this year is that the gap between trust of the I forgot what the phrase is but the more elites and sort of the mass of the population has never been wider than it is right now and I think some of this is the stories Bernard that you were telling or Meg you were describing about how engaging the broader community having people deeper in the organization this is the opportunity for all of us the opportunity for all of us is to do what makes it to get their fat first get to the future first but when you get there make sure that you are show up with the right values because the values of the fourth industrial revolution are different than the values of the third revolution and we all know that okay and that's the transformation that we're all going to make together and it's very exciting I mean there's never been a more exciting time in the history of of industry I want to come back to this I just want to pick up one more point around this digital transformation journey broadly which is and for all of you so you don't all have to jump in but whoever how do you know if you're going fast enough and how do you know how much investment is enough investment I think everyone would say we need to go fast and we need to invest a lot I think that's you know I think that's pretty but you know you're the CEOs you're getting things brought to you all the time at least my experience is most are impatient they wish things were happening faster than they were how do you judge for yourself like what's the pace and are you satisfied you know to to drive in this direction right now well I'll start on that because not only as I said have we transformed Hewlett-Packard but we do this with hundreds of companies every day and the key factor I think to these successful journeys is having a multi-year plan that you've got to understand where you are today what the cost structure is today and what the limits to your infrastructure are in terms of your business strategy and then you've got to have a multi-year plan just like every other project is managed milestones cost reductions people in charge and there has to be an inspection process and you have to build a multi-year plan based on what you can afford because you have to save to invest and then you have to hold your organization accountable for delivering against those milestones and it's tricky every organization is different if you're in the healthcare business there's a whole set of regulatory and HIPAA regulations that you have to be mindful of if you're in the financial services area the regulatory overhead there is just enormous but if you do not have a plan you won't get there incrementally and my advice to CEOs is hold your IT account your organization your business accountable for a plan and then execute the plan and you can change it as you go along if new technologies arrive things like that but if you do not have a plan it's that old saying if you do not have a plan any road will take you there if you don't have a destination any road will take you there and this is where I see a huge cost overruns and disappointment in the delivery for the businesses I would just build on that I know we're not going fast enough at least I believe that and I want to hold that to be the truth you know I'm working on what I call inside the organization that we're increasing what I call the BPMs the beat per minute and we're getting better at it but we're still not at the ideal pace secondly our challenge that I think about all the time is I have 50 70 plus years of legacy systems and so I'm I'm flying the plane today and I can't just turn stuff off and so how do I balance what goes away because of all this technology and what in fact is still connected and must be connected to it I think the second piece is working very hard on what should I not be doing and turning to competent organizations to do that on my behalf as part of the integrated strategy and so that's a big piece of the work that we have going on that is aimed at moving faster but I don't feel that we're moving fast enough well I think a lot depends also on how you judge the own environment you know because obviously I mean having a long-term vision that always wins absolutely always wins and I think that old Andy Grove's old saying only the paranoid survive is probably more true today than it ever was you know and I mean in an organization we're 127 years old you know so in that organization I think I think the push cannot be strong enough and the only thing that you have to judge as a CEO when are you over stretching the system right because then you're losing it and cracks appear you know but you basically have to have to try to move them as fast as possible and it's the fine tuning when you see do you see cracks do you have to slow down but I think that paces absolutely essential absolutely essential if I if I it's your question is a lot of headache right because on one side you know you have to invest because well you figure out that the world will be digital and how much money first it's expensive it's really expensive it's asked for an investment and that's an investment that you don't do in places that you used to do so you have really to arbitrate the first thing on my my conclusion after many years of spending too much money in things that were phantasm rather than reality is really to every time they come with we come with an elephant project is to slice it in the minimum trenches and go to the market as fast as possible and test the customer and bring the customer from day one into into the sinking and frankly I struggle to do differently we are becoming very empirical in the way of doing and I would rebound on what Meg was saying it's people spend a lot of time on technology but it's a lot about business model and that changes all layout of the business model and we never spend enough time on the business model especially in engineering companies it's a lot of religious fights about technology which is don't make sense I make one last observation here which is you can't always go faster than you think you can when I came to HP HP was in a fairly challenging situation I was the third CEO in as many years and yet this was an entirely new environment for me and I was very worried about breaking the company you know would I be the one who would actually run the car off the cliff looking backward I could and we moved very fast but we could have moved even faster so I would just encourage everyone to think let's push the edge of the envelope Klaus said it well let's push until you actually start to see a few things crack at the edge and and frankly I think you underestimate I underestimated the organization's capability to move fast and I think that is probably almost true for everyone in this room great so I want to shift a little bit to the culture stuff before we open it up for the room for questions because it's such a fundamental question and how do you bring the organization along I thought the comment that a number of you made in different forms where the technology is tough but the technology isn't the toughest part the toughest part is how do you entrust in the organization and with your customers and how do you bring along your organization I guess I'd like to start Mark and Jean Pascal you guys are generating so much data now that your customers can you you're changing the way people think about data and how you wire the organizations together and leverage that both inside the organization and with your customers and I and I think Mark you made a comment in another setting that the data was almost dark matter inside the inside the organizations what are the unintended consequences and I don't mean that just in a cybersecurity sense but the challenges of living in this world of big data and bringing the cultures along to be able to use it in the right ways well I think Jean Pascal is a great example as as well as the other panelists as well but I think you look at the incredible transformation that has happened with Schneider Electric first you have a company that has acquired all these amazing companies around the world for any co that's going to be scary right there that you have to create a culture a common culture a collaborative culture and then number two a transformational vision that he's going to be able to go to any government agency to any business to any consumer and ultimately get their residents their office building their corporate facilities online manage them monitor them do things with sensors that have never been done before that this was aggressive you know and then you look at the market share gains that he's achieved against his competitors it's just relentless execution on a compelling vision and I look at my own company today we're the fastest growing software company in the top 10 and I'm fortunate that you know all these panelists are also our our customers and that we get to work with them that's our joy every day is the opportunity to partner with these customers that's what makes it fun but when you look at somebody who pushes you and Jean Pascal pushes and even somebody like me it's it is it does become scary and that's the first time I use you're saying that I'm trying to be nice and and I'll tell you that you know speed is the new currency of business you know I have a good friend of mine who's just saying that all the time you know the most dangerous place to make a decision is in the office we have these incredible devices that all of us have here now and this makes everything go faster this is this is what is making everything go faster because communication is just happening faster and faster when I first started coming to world economic forum in 2002 you know we used to get these proprietary devices they didn't work you know nothing worked the network didn't work whatever I think I don't know if it was Joe Schoendorf was running it but something was very deeply wrong and now you just come in here and it's just I know everything is like lightning how fast that is going you know and well there is some of that we did put Salesforce end of the world economic forum that helps but I I think that you know that that's what's going on the reality is it's the technology also enables speedier execution and so in that way it's kind of a little bit of the medium is the message that is we know we have to get more connected we all look I used to come to the world economic forum and talk about well we're the cloud and you know we're rateable technology and we're a multi-tenant architecture and we're subscription service and you know we're not you know a capital expense we're an operating expense that's all of these companies what company it does not want to be a cloud company today what company does not have a multi-tenant architecture what what company doesn't want to move to that same business model that we have and that's kind of what's cool for us and that that's also what's fun but how we grew our business was speed you just cannot go fast enough and because if you're not going fast enough somebody else is and that's why we all have to be a little bit scared and we all have to go a little bit faster Champa Scott do you want to add anything you can give the the other the other picture on the other side of the mirror but we were facing the issues that mark described very well lots of acquisitions we're operating as a federation of separate companies and customers we're harshly complaining we want one solution we want one Schneider and any kind of traditional IT program in in this dimension was was in incredible cost long time of deployment time was actually more important anyway met them it was pretty much at the beginning great solution first reaction what put our customer data on the cloud in San Francisco of a my dead body okay so but but then we went into it deployed it in one year so suddenly you've got one repository for the customer 360 degrees on your customers your call centers your people underground are equipped with mobility unable to do that it's been great for us and it's been a part of the evolution of the culture next day everybody has the same visibility on the same customer on the trust issue is behind us now so now it's about building together new functionalities which we did one one year ago when to the next level Mac you know we were talking before this you're also seeing this how do you help bring different parts of the organization together and sometimes take them apart and sort of build the organization through the IT and but also bringing the people along I don't know how you see this in the context of culture and strengthening organizations well as I said before and I think has been echoed by the panel speed is so important I really do believe that the future belongs to the fast and so how you transform your organization I have a couple of thoughts on it one is and this will sound like motherhood and apple pie but you would be surprised how often people don't do this the right people in the right job at the right time with the right attitude and depending you know turnarounds transformations are not for everybody and so you've got to look all the way down your organization do you actually have the people in the organization in the right job who can help you accomplish this no amount of pressure from the top with the wrong people will bring you home and so we've done a huge change out of people because we had to have the right skill set the right attitudes frankly the right constitution to do this the second thing I would say is communications communications communications you I feel like I probably some of you know I ran for governor of California often I feel like I'm giving a stump speech at at HP because we say the same thing over and over and over again and you would be surprised after you've said it 57 times people say I never knew you thought that I mean it's amazing and and when you are communicating with large groups of people it is actually not the facts and the figures it is the stories that you tell no one remembers the facts and the figures they remember the stories that you that you tell and that's part of the way we're driving culture change and then the last element of this is I fully believe that you do not get what you do not inspect you do not get what you do not inspect and so you've got to set your organization up in a way that the results and the processes and the milestones get inspected and then corrective action is taken early because I totally agree with your own back out this Pascal you could find yourself a year into something and if you haven't been inspecting it on a weekly basis thing is wholly off track and you have lost massive amount of time and frankly a fair amount of credibility with your organization so it's not people say you know you don't get what you don't expect it doesn't sound uplifting but it is because you're making progress that then you can tell the organization about it shows the organization what you care about too just the act of tracking things is a signal this one matters to me and so I fully agree and then last but not least of course is a set of shared values and beliefs and I think most great historic companies have real DNA that they can build from I'm very fond of saying that actually founder DNA Mark will be happy to hear this founder DNA it's very hard to kill and in most cases and in Mark's case that's a really good thing they're trying don't worry you're so right you know BCG's the founder left the firm in 1980 it's 35 now 36 years later it is still so much ingrained in the way we think and talk it's a very listen very bill Hill and Dave Packard have been gone from the company for 30 years and when I came to the company I could feel the DNA I could see it I could smell it and I said let's do more of what we do well and then make the to-do list as opposed to let's find all the things that are wrong and that was a winning formula I'm conscious I want to get to questions but I'm just really interested Bernard and cost you have frontline employees that are you know in businesses that are very traditional ways of operating over many years and if you could just both quickly talk about the cultural aspects of making these changes happen and really getting it to seep into the organization I think it'd be really valuable just two quick comments the first one is one of the things that certainly I'm learning in my role as CEO of a great organization is the cultural changes about me also I remember a long time ago someone told me a leader without a follower is just a person taking a walk and and so I want to make sure that there are people with me on this journey and so that means that I have to figure out tapping into their value system how to engage them in the change process as well the second thing is to Mark's point and I haven't read the book yet but I will um in our industry and in our organization our physicians and nurses is for me a great example of what happens when you have a trusting relationship and at the center of that trust is the physician culture the nursing culture is that I'm here to take care of the patient I'm the advocate of the patient I have the best interests of the patient at heart and it's very important to me that as we make the cultural and technology changes that we keep that centerpiece there and so their voice is very important to the credibility of what we come up with that's going to maintain if not enhance the trusting relationship that we want to have with now almost 11 million people and our business is not a transactional business it's a business of relationships and building on trust I think that what max said the founder spirit for a company that's old I mean it's also an advantage what what I've done is I mean we have a great history I mean we have a rebel rouser who founded alcoa it was this young kid in his early 20s going against the steel robber barons basically right within with the material that nobody knew how to make it right so to connect it and say wow this is our history we get this disruptive gene we got to live up to this you know if this kid wouldn't have done this we would all not have a job we wouldn't have lived so it is it's very strong that's the first thing the second thing I mean it's all about people I I totally agree so it's tone from the top it still is very important it still is very important I mean we've we've used this thing I mean be a more chumpeter or I've coined this thing think louder act faster right so so but then the third thing which is something that only dawned on me by having seen this I think there is an advantage of bringing established knowledge you can constantly refresh it with no established knowledge together right and if you can master this and this is not something the organization can do by design I'm give you the example I we have a very good internship program we're currently making it better but if you were to say hey you you now define exactly who we are recruiting as an intern some good things that we seen in the last years would have never happened so I run into going into a plant I run into a kid who does an internship there and he they gave him a little space and trying out stuff he's working with microphones with microphones and listening to a pouring process a pouring process and I'm thinking what on earth is this kid doing and I'm stopping you know and and I asked I asked him he's African American in fact he's African originally you know Michigan University and he says well I worked I worked in the automotive I worked in Michigan University a little bit on the automotive and for automotive acoustics are very important and and every material talks to you I said wow every material talk we never thought about this you know so what does this material tell you and he says well you know we have this problem I don't want to go in too much depth you know but it's a very expensive problem because we never diagnose it happens it happens at the early part of the process and we only find it in the later part of the process so in the meantime a lot of value it gets lost you know and he says well I think it happens because something cracks and that's right and I can listen to the material and I can hear whether it cracks you know so so I said oh wow let me see this and he shows me this he has an oscillogram I mean he probably had spent no more than two hundred dollars on this you know so he listens to it and you can hear you know suddenly the oscillogram goes up now he knows it's cracked and I said no no what he says now I know it cracked you know now I can take this and now we go into a digital regular radiography which has moved on and I can do a 3d digital radiography on this piece now I can install that in the line as constant quality inspection that's an idea that nobody would have come up with so that's why I think you have to allow you know to get some fresh talent in that has this naivety or some totally different backgrounds and if this comes together with established know-how that something really cool can evolve from this thank you and thanks for the University of Michigan plug great to hear uh we have time for a couple questions uh Joe let me challenge I think the microphone let me challenge and we'll need to keep our answers quick so we can get a couple in before Joe Shondorf venture capital 50 years in Silicon Valley started working for HP 50 years ago computers in those days where IBM Snow White and the Seven Dwarfs the Seven Dwarfs are all gone IBM is in pretty different business this is my 20th Davos I looked last night top 10 most valuable companies in the world five of them are in high tech let's take them Apple Alphabet Facebook Microsoft Amazon when I came here 20 years ago I looked it up Jeff Bezos was one year in having Amazon online Guillemillo was still running Apple and they were close to bankruptcy Mark Zuckerberg was 10 years old Larry Page was still at Stanford and Microsoft had just had its first two billion dollar quarter and he was still working at Oracle two years away from starting Salesforce and the transformation of the cloud Larry Ellison is still trying to figure it out and you've got one of the world leaders sitting right over here my my real theory is and it's what venture capital is all about big transformation happens because the big companies don't get it right and a startup comes in and runs at faster than anybody can and builds a new industry end of story any reactions particularly from the very strong legacy companies that are sitting up here I totally agree absolutely yeah I mean I agree right it's Darwinism and so we all have a responsibility to continue to make our companies relevant and reinvent because you know listen the whole world has changed and if you do not reinvent you'll be eclipsed and it's a challenge for the big companies and the older companies the other challenge at least in my situation is a lot of people inside of my company and me included would consider as very successful and so the question is always this tension of how much change are we trying to produce when we're getting all these positive results already so that becomes an ongoing challenge for how you keep the organization fresh and moving forward the innovative companies that right now are coming into the healthcare arena I view as a fresh of a breath of fresh air because they are forcing us to think very differently and to see on the horizon what's possible okay others toshi maybe one last question I have a question about what is critically different from third industry revolution to fourth industry revolution we heard about speed and also communication and culture and value it all seems to be the same but mark you mentioned about there's a value will be totally different from the fourth and third I'd like to ask you what is critically different what do you think we should do totally differently from the past well I think that you know I mentioned trust I mean I think that's a big the big one because when everything is connected things are going to go badly wrong and there's a lot of good examples of that and I'm going to have people in this room have read the book a ghost fleet yet but it's one that I would highly recommend and it's about everything getting connected for the the militaries of the world and you you're about to enter an environment which is what this book so beautifully lays out that's kind of unprecedented that you have lots of really powerful technology some information technologies some biotechnologies manufacturing technologies and all these things are kind of coming together at once which is really unusual and it's going to transform all of our industries and I think that looking back at our earliest days I was coming out of the third industrial revolution I was coming out of a third industrial revolution company oracle looking into the fourth industrial revolution and when we first had a reliability crisis at sales force I didn't know what to do you know I was kind of acting how I was acting at oracle which is well you just don't say anything you just hold on and we'll get through this instead we had to move to a transparency based organization a transparency culture we built trust through transparency we had to put up a web page trust dot sales force dot com we had to disclose everything we had to see that our customers and our partners were rooting for us to be successful part and they were part of our team that was very different so I think that we will be guided by a different set of values and I think the faster that we move on to those values the more successful we'll be the faster we will get there and this this is going to be an amazing new world I did I did want to mention that just before I walked in I got a note from Klaus Schwab on this and he asked for Bernard to stand up during this so Bernard would you just stand up and evidently it's Bernard's birthday today Klaus asked us to sing happy birthday to Bernard so happy birthday to you happy birthday to you happy birthday dear Bernard happy birthday to you okay so let me time is short and we want to keep everyone on schedule I'm gonna ask the panelist one quick question but it's a it's an important one which is the world is changing quite fast could you could you give an example of what did you think is the big bet that stands out for you that you think three years ago had you been sitting on the stage you wouldn't have even been thinking about it wouldn't have been on your radar screen and now it's pretty fundamental to the way you think about your future mark well I think the big bet that you know we had to go through that's really transformed us as an organization is to be much more focused on industries you know when we're partnering with high technology with health care with manufacturing you know with electronics or everyone in this room we had to make a pretty big shift internally and once we made that decision we had to go all in great Jean Pascal probably two things first we have several poles of digitization customer relationship connectivity of product supply chain the way we work together the need to integrate them because it's rotating fast and you need to connect everything together with the rest so it's just a need for consistency which is a on really you are speaking about the new values of this I don't know if we call it the force and things but I've been really sharp on where you want to make a difference and really be very sharp on the partners you want to associate with that importance of speed I mean not that wasn't on my radar but as we are now we've decided to separate the company so that both entities have the unique profile and the speed in which we have to do this and we have to continue to to speed is everything I think our big bet was a great fear that we would open up all this new opportunity for access and demand and that it will get used unnecessarily and what we have discovered is people are smart and they don't want to spend all their time with us but for the right things they want to come to us and we have figured out how to manage all this new demand excellent like cloud separation we have to get smaller to get bigger to get faster and smarter and so separating 110 billion dollar company with 300,000 employees would not have crossed my mind three years ago and this and the other one is lean into completely disruptive innovation we're trying to reinvent compute with the machine excellent so I'd like to close by thanking this outstanding panel I'd like to just highlight we heard so many great things we don't have time to recap but this point the technology is not the hardest part it's how you think about all the things around the technology the human beings the organization the way you make it work the repeated emphasis of speed and adaptiveness and agility but particularly speed to move at a pace that is beyond the normal comfort zone to drive things forward that a strong business model a robust plan is really the foundation for pushing forward the essential elements of trust and and how much earning trust with your customers and deep in your organization is key to drive this and lastly one of my favorites was a point that Bernard had made a few minutes ago which is complacency is the enemy here these are all leaders of very successful companies they've come in at different points in time some were different challenges but but but a lot of what's required here requires cutting against the grain in the mindset of highly successful organizations and really resisting the natural temptations to complacency thank you all so much for joining us it was wonderful to have you