Future of Business: SAIC’s Toni Townes-Whitley on Leading Strategic Transformation
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Welcome to the hb aircars from harvard business review. I'm alan beard.

For the next few thursdays, we're bringing you a series of interviews with some of the world's leading taxi E S. And founders to hear their perspectives on artificial intelligence. And other top of my issues today will listen to a conversation that tony towns, Willy C E O of S A I C, had with H P R editor and chief audiencia during our recent virtual future of business conference.

Si c is a company with more than seven billion dollars in annual revenue and twenty four thousand employees. IT provides engineering, digital, AI and mission support to defend space intelligence and civilian customers. Tony took the home about a year ago after stance is a senior executive at microsoft cedi federal in unison.

SHE also serves on five boards, both corporate and non profit, and is a former U. S. P. Core volunteer. So SHE has some useful insight on how organizations of all types can work together on our biggest chAllenges. In entering questions from audience, the audience, SHE shares her thoughts on leading effective strategic transformation, up skilling employees and guarding against A I bias. Here's that discussion.

So let's dive in and talk about how, as an incoming leader, you, you're, you're able to figure out what needs to change and what levels you have to try to bring about that change.

A couple of things are very clear. I C, I C was first, IT was the first in its market to have an employee owned Operating model to really to Operate in the world of stem before stem was cool. And that was the history.

Then I started to look at the data, more current data, relative to S. I. C, having gone a bit flat in its roth cycle. S, A, I, C, having to more differentiated portfolio.

And I say I, C, not being as considered as deeply a market leaders that had in years past IT was in those certain inputs that I started to think about what would be the the areas of pivot or two in that would be helpful in some key areas that would most likely a corporate to a shifting the growth pattern and almost resetting essay I see back in the market in the point of leadership. So I started to consider those as hypotheses, and I came up with four hypotheses of where the company needed to tune. And I wanted to test those in the first year.

Well, so yeah, let's talk about this for because IT, from the outside, that looks like you decided to move on practically everything. You, the product portfolio, the market strategy, the brand, the culture, you know, how do you get buying across the copy and how do you execute on so many different fronts?

So let's start with two, nine versus wholesale change, the magnitude de of change in each, in each area. As important to understand, we were very clear about identifying where we would change and what would stay the same. In the spirit of starts, stop and continue, we had those exercises across the company to ensure that people understood that not everything was changing.

We also continued the four pips. So we started with portfolio made in heavily on the portfolio with questions on whether our portfolio was truly enterprise scale, whether we had built point solutions for unique customers or whether we had enterprise capability to go after large, large programs. We started to ask about whether our technology was, in fact, state of the art and deferential and whether that technology was deployed across all of our programs as well as were we building that into our pipeline.

So we started with portfolio. We've then went to go to market and culture, and the two came together as we identify what kind of company, not only how did we want to go to market, but who do we want to be as we go to market as individuals and collective, as I say, I, C, and identified the pivots within those areas. And then brand was our sort of our final move to really start to speak to given the shift that we're making inside the company, what's the future? A brand of S I C.

S I C has a phenomenal brand. Our our study and research indicated that we were very well known. But if I had an nacro isc brand, everyone looked back at a golden moment and essay, I see not a forward looking brand and understanding what we were going to be as a company in the future. So how do we get the buying combination of laying out what was changing and what was not moving in sequence, looking for tune opportunities and quite very reality, I think, probably most importantly, putting an enterprise Operator model in place with metrics and proto season rythm that hardened that opportunity to change meaning not just sort of words and hopes and desires, but fundamental data. Dhyan ms in the business are through metrics that we use about fourteen and I track every month, but seventy that are array across the company at different level to help us know that we're on track and that we're moving and to give signal and of, quite Frankly, creates and listening systems in the organization.

So so this is great. I hope people, we're taking notes. This is kind of a master class in how how you do strategic transformation. This this is really great. Let's digging in some of these areas. On the portfolio shift area, I I assume that a lot of that is about embracing new technologies, including A I curious, how do you do that? How do you Operate on the cutting edge while serving new complex, in some cases, government clients that need the highest of safety and security and reliability.

So when I talked about the hypotheses, adding that I came in on the portfolio, obviously coming from, you know, company like microsoft, super focused on our capabilities and and where we were differentiated and whether we were at scale.

And I found I was so pleased to find that we actually had clear differentiation in areas of what we would call sort of digital engineering, secure data analysis and uh, Operational A I um you mention A I the way we look at is a very Operational security level of A I that happens to mission critical environments as well as a secure club, I believe ed, a broker and my great organizations to the cloud. We also I also saw that we had some work uh, in in sort of what I called horizon too. So we we were starting to turn the corner and edge computing and understanding quantum and starting to move into the areas that will be sort of the future leaning areas for the company.

So I was actually quite pleased to see that we had that capability. How do we deploy IT, though, in with within the department of defense, the intelligence companies, the space agencies and the civilian government was really our conversation. And we made some investments in the first year, in some to harden those areas and to create opportunities, what we would call sort of sand boxes, to create the client environment and ahead of ahead of sort of deployment IT to the client, testing IT, modeling IT, simulate IT so the client could see what capabilities existed.

We're very proud of the worth that we do not just an AI. I know that sort of the the hot topic I talk about in terms of Operational AI because A I is a category of capability, as you know, and we have in in every part of our company. But where we've focus our A I and our data is that we spend a lot of time on the security and the accuracy of data that supports A I so that the the models uh are actually um really robust so that when those large language models reason, they reason over the correct data. And we see the use of A I across the department of defense in targeting, in predictive analytics, in the ability to bring down the decision timely ines, in the ability to inherit data sets. And so we've seen great receptivity to that across the department of defense and the entire companies, most notably probably with will call the combat and commands that where A I is most is most critical for them in their data day Operations.

You know, on the AI question you talked about about some of the use cases, this is a real civilian question. But anyway, i'm sure you know some people listening might feel little uneasy about the idea of A I tools being used by the department, other federal agencies. You know what to what extent are you even being able to think about so called responsible use of of of A I? Well.

it's kind of corn center to how we think about AI when you think about A I and mission critical environments AI in terms of training air traffic controllers that that secure our our air space in the us. I C.

Control trains every year, traffic controller in this country, within department of transportation, AI at the border of the southern border, within the customs and border patrol, we run that capability, the technology that secures our southern border. Uh A I that is uh part of decision analytics for a department of defense as well as for our national security agencies and and and organizations. We spend a lot of time on a the the ethical aspects of AI.

We are part of standard setting with this, which is the standards body within department of commerce. We have our own trust where the initiative we do with George washington university, we are sort of first and of its kind as as a system in a greater mission integrator that is really caught fine. What great AI ethical AI looks like.

But we think about AI in the context of the data that IT is reasoning over and the security of that data. And we see A I also on the civilian side, you can use A I to improve a scenarios like what we find in our biometric center. We have we run one of, I think maybe the center um is the only of its kind in the world where we are able to test facial recognition technology and test the ability that AI and facial recognition and image capture.

We test and chAllenge whether biased is introduced as skin tone gets darker. We know all of the concerns in the research, and we do this for the department of homeland security to ensure that we understand what bias is introduced in facial capture. And we've been able to to learn and quite Frankly, create patterns and all kinds of research and set industry standards for not only the U.

S. But internally on what is great image capture look like. That's a concern that citizens have that they are gonna represented correctly. And we have over four thousand volunteers that have come through to give us accurate testing on facial recognition. So i'm proud of using A I to actually address by us, using A I to improve mission and also being held accountable for A I standards in the ways that we do that many do across our industry.

Yeah so I mean, it's a really interesting example of of public private partnership. But you know have to add, how do you navigate a client base of government entities that are bureaucratic there, beholding to budget making, which is an always this music thing in the world. You with political turbulence can mean you big swings in an approach policy from one administration to another. That sounds like an incredible chinese. How do you handle all that kind of uncertainty running the business?

No, it's it's a very fair question, is a very real data day experience. I will tell you the continuing resolutions that become a norm, unfortunately, in terms of how the budget a sort of a locks happen. And we are somewhat used to ah how to manage that on a year over year basis.

Uh, the effect really is in our customer base, uh those kinds of sort of budget stalemates create great chAllenges for our customers. And how they do long range planning, multi year programs, how they handle interviewer money are the signals they want to send to the prime sector or where to invest. All of that assumes an ongoing in a consistent budget process that has been truncated off.

And by continuing resolutions, large swings in the executive branch, quite Frankly, don't have as much of an effect on our on our company. When I look at where reposition across the defense and intel uh sectors. Quite Frankly, those signals come more from the conflict that happening around the world and where those customers are, are focusing emerging tech.

We happen to be in the areas that they're driving to, which will be sort of cloud based come, come command and control systems. That's where we specialized and that's where they're spending. So we're not overly concerned there.

On the civilian side, it's a fair question. Our footprint in civilian agencies is primarily in areas in those large federal cabinet agencies that are somewhat um not affected by political swings. Think of the va, the veterans administration, a department of homeless security, department of transportation, the state department. That's where we find ourselves with our largest business. If we were in agencies that we're kind of more right to some of the political father, we would probably be paying more attention in that area. But right now, we we believe that our focuses continuing to drive our national imperatives around all the main were fighting um improving the citizen experience, improving on undersea dominance that this uh this country has had for the last fifty years, uh really driving towards next generation space and doing all of these sort of activities collectively. Uh, we're not as overly concerned on the political landscape right now.

What does the future hold for business? Can someone please invent a Crystal ball? Until then, over forty thousand businesses have future prove their business with net sweet by oracle, the number one cloud E R P, bringing accounting, financial, ageing, inventory, an hr into one platform with real time insights and forecasting, you're able to appear into the future and seize new opportunities. Download the CFO s guide to A I machine learning for free at net sweet dot com slash idea cast that's next week. Don't come flash idea cast.

Um so I want to go to a couple of audience questions now and I have some more questions you later. But this is from adam. Not sure where adam is, but the question is what key metrics are you using to track the translation? Could you give some examples of know yeah what are the numbers that mattered?

Do you know yeah appreciate that. So for our shareholders, quite Frankly, other stakeholders, we had to return to a mid single digit growth company. We have been at low single digit for the last five years.

We had to improve our growth. We had to improve our profitability. We are outside of the profitability range of our peers, and we needed to position more strongly in the market is leader.

So in in the spirit of the financial growth side, we measure our growth in terms of how we bid our business in the number of submissions that we are making. We had been declining in the number of proposals we've been submitting. A we look at our wind rates against those proposals, and we look at our body to grow off of our base business.

And we measure those in terms of submissions, win rate and on contract grow in terms of how we grow. It's not just that we grow, but how we grow. We had four crook key growth vectors.

Civilian is one of those were rebalancing the business to be more words. A third of right now, a fourth of our business in civilian. We'd like about a third of that business to be civilian.

We have a large dressing market there. It's very profit for us, and we also have great capabilities support civilian agency. So that's a growth vector.

We're moving our business into more mission and enterprise IT. So back office technology for the cio s and front office for the mission. We measure that move of our current program revenue as well as our future pipeline revenue. And then we measure our cultural shifts, our cultures about enterprise mindset.

Even though we have a wonderful entrepreneur spirit, we trade as one symbol, and the chAllenges that our customers space require all twenty five thousand members of our company to come together and all of the technology of our company come together. So we measures sort of where enterprise mindset is showing up across the company, demonstrably in terms of how we're working together, pacific programs. So those are some of the key metrics that we look at.

We're now just starting to look at some brand metrics. But think about the four pivots that we introduced, the four pivots we are measuring against each of those four pivots and looking to see if our strategy quite Franklins taking hole. And today, we feel pretty good that had started to tackle.

Yeah well, let me let me ask you more about culture. You know you talked about you know that that's something that your measuring is. Well, tell me more. I mean, there are specific actions that you've taken that are showing results, whether whether on a qualified or on a quality .

basis here. I think I think there were four pivots to our culture that we introduced. One is that you ve heard we talk about moving from a not just a pure entrepreneur culture, but to a blended culture that recognized an enterprise mindset.

We also talked to our culture about being able in a very a third of our folks or military, former military, we have a very respectful, polite culture, but our ability to debate, debate topics to get more chAllenging in our culture, and little bit more bold and chAllenging, and interrogating ideas, not interrogating each other. So that sort of a social, how we collaborate type of way that we wanted to change the culture. We also talked about taking a little bit more, being a more bold culture in terms of taking risk, calculated risk, but going after big bets and amy, those.

And finally, the pivot for our culture was relative to incubating talent. We were a great talent acquisition company. We have acquired talent very, very well.

We use metrics like days to fill a reposition, but we need to shift to building more talent in the organization. And that made putting metrics on managers, giving them tools to incubate town. We call that up skilling.

And we've run three pilots now across the company, and now we are investing more and more and up killing up skilling in our individuals who are interested in moving up with more technology skills like cloud or data or AI, moving up with more consultative skills. They've been an admission they want to know how to beat more business development oriented, some people who are super technical learning more mission understanding of of of what our missions do. So in those four pivots, we've been measuring through all surveys how our employees feel more enterprise mindset.

We track when there's a program that lets say, is being supported at the enterprise level that requires each of the groups to step away from one of their you know their objectives, support the enterprise, how often that occurs. We started to measure, as i've said ah, how much talent is being incubated through upscaling. Again, we see early indicators.

Our post surveys are up. Uh, we see greater enterprise plays, if you well. And we're seen sort of early indicators that the upswing in is a is a big hit inside the company for career development. So that's how we're moving. Orrin will stay down that path for the next few years.

You had sort of hinted earlier or implied earlier you about bias in in of A I and A I output so this is a question from from some of was watching named iris who's interested, you know, from your experience, how do companies address bias and AI implementation in their business? And that could range from H. R. Processes to the content they putting out there in the world or the products of developing? How have you come to think about that?

So I can speak for all companies. I'll say if I say I see we run an AI council. We bring all of the disciplines of AI, from our internal I T Operation to our external innovation factory, are every one of our functions, hr legal, our finance function and those that are client facing. They all have representatives on an A I council that meets routinely to address issues of A I in the business, are using A I for proposal development or recruiting or hiring uh but also A I um to to our customers. So A I from the business, which is how we are embedding A I in our solution sets going to our customers.

I think one of the best ways, and i've learned this over the last few years, not not only hear IT and I say I see the previously microsoft terms of having a multi dimensional group that's looking across the business to understand how A I is being designed, tested, deployed and then we assessed. So that will cost sensitive uses of A I are being reviewed by a broad, diverse. It's important that that that team is not only diverse in their thinking, diverse in their background, but actually trained and have standards and metrics.

And that's where i'm pleased that we are part of standards setting within the government. We have many different initiatives for standard setting for ai to make sure we are current with always of testing and understanding the use of A I. And so I stick IT started with having a dedicated set of individuals that are multi dimensional within a company that are routinely looking at every active A I, both the risk and the opportunity.

Now you know, bias obviously doesn't exist only in the world of technology. And i'm curious you're one of two black female CEO in the fortune five hundred. You know i'd love your thoughts on or or if you won't share what hurts, if any, have you face getting to this point? And you to what extent is that the limited number? Is that changing? Do you feel that the know they're more opportunities now for more .

people have their bit hurdles? absolutely. Ad, that's a very fair question.

And supose tion is is correct there. And hurdles on every levels. Sometimes the hurdles are there that are maybe more gender.

They sometimes they are racially based, as I said, african american female. I show up as both every day. And there are perceptions sometimes of others, uh, the bark can be set inappropriately higher, inappropriately low. I've had all kinds of mico aggressions throughout my career, but I also want to talk about not just the hurdles that i've seen, but my own hurdles. There was a great book written by Becky shamma twenty twenty years ago called it's not just the glass seal and it's the sticky floors.

There were some sticky floors where I helped myself back, where I was concerned about being so representative, so many groups, that I was slow in some of my decision making and sometimes uncertain about my next step. So what I started to deploy over time was a career path that looks more like a staircase. There were horizon on vertical aspects of my career, and I started to look for the next move after three to four years in any role where where I was on the horizon and vertical, which i'd define quickly as vertically, I was looking for real stretch opportunities, almost adventurous and intellectual caffeine, that would chAllenge me in ways I had never been charged.

And then I was looking to apply the learnings from those vertical opportunities in in broader and larger opportunity roles in different companies. And so if you look at my career, IT is a it's almost a staircase of vertical chAllenges and the horizontal application of what i've learned, uh, some people stay in the vertical. They're always looking adventure seekers.

Uh, some people stay in the horse zono. They become, you know, the Smith and the most the series person in the room. I wanted to keep chAllenging, but keep applying what i've learned. That's how I built my career.

And as part of that, it's given me some opportunities to to take moves like going to microsoft was one of those vertical moments are, quite Frankly, uh, leaving uh artha Anderson as IT was closing as a consulting business after in run and coming to a uh a business and infrastructure technology company like you. Nesses was a true vertical for me as well, but i've had opportunities to apply that learning. S A I C is in the horizontal face for me, where i'm applying so much learning in this new opportunity.

And I will tell you, i've tried to address the adversity that comes a the the fact that there are so few individuals that look like me with curiosity, both in terms of understanding, why aren't there more a women who look like me in this role? What do we need to do as root cause to address those issues are helping people address the biases that they are sometimes can see and how they think about putting women and and people of color in these roles and starting to understand that there is much more supply out there and available if we would broaden the approach, provide access and start to measure how we are moving people through not just careers, but getting focus into career movie opportunities. I've had i've been blessed to have a few career movie opportunities, and that's why i'm sitting in the role now.

That was S A, I, C. CEO tony townsville, an h. Br editor in chief audiencia, speaking at a virtual future of business conference.

I hope you listen to all of our future of business series and all of the episodes. We half the H, P, A cast about leadership strategy in the future of work. Find us that H B R dot org slash podcasts or search h we are in apple podcast, spotify or whereever you listen.

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Thanks to you for listening the H B. R idea cast. I'm alson beares.