Executive committee field trips to meet VCs is helping OC Tanner transform itself from a manufacturer into a software company, writes CTO Niel Nickolaisen

I have seen the future and the future is technology-centric. I believe that every company is – or is becoming – a technology company. If an organization does not think of itself this way, it will not exist five to ten years from now.

When I consider the advances in mobile, social and, particularly, advanced analytics, it seems that every single product or service we sell at OC Tanner will be offered or delivered as a technology.

This idea haunts me. Why? Because I am, in theory, the person who is supposed to know the most about technology, and lead technology efforts. My executive peers are experts in their domains and might know how technology affects supply chain, manufacturing, accounting or human resources, but if my point of view is correct, and we are becoming a technology company (if not, we are doomed) then it appears that I own our transformation.

We have been in business for ninety years, and our historical focus and core competency has been custom manufacturing. We still do custom manufacturing, but our future is in our software products – the ones our clients use to track the employee recognition rewards that lead them order our custom merchandise. We now compete head-to-head with companies that do not manufacture anything but software.

I am haunted because I feel as if I own the future of our long-term successful company. I am haunted because I need my staff to understand our technology future. I am haunted because I need my executive peers to see the same future I see – a future in which much of what we do today will be displaced or replaced by advances in technology; a future in which, due to technological advances, much of what our clients do and expect from us will be very different.

Seeing the future

How do I help everyone – including myself – see this future? One of the most compelling things I have done is take members of my staff and the executive team to visit venture capital firms – specifically those that invest in leading- to bleeding-edge technologies.

Why do I do this? Because these firms are experts in understanding the future, aligning that future with technology and then betting real money on the technologies and companies that they think will win in the marketplace. We are, therefore, able to rely on their proven expertise. These visits have served us well and I recommend a similar approach to every IT leader I know.

We make these trips every two years, which helps us track trends at two levels:

  1. technology level – how VCs view the major changes in emerging technologies.
  2. investment level – what specific companies and categories they are investing in.

Several visits back, we saw that the need for IT agility had created a trend in containerization. We jumped on the container bandwagon early, and it has served us well. At the investment level we have been able to learn as specific companies have flourished, or struggled and pivoted. This too, has informed our decisions and approaches as we as we transform into a technology company.

We completed our most recent visit a few weeks ago and it was every bit as valuable as our previous trips. Here is what I learned this time around:

Venture capital at the technology level

Advances in machine learning and artificial intelligence (AI) are the driving force of change across all business processes and all technologies. Machine learning and AI are interesting because each advance makes it possible to reach the next advance on a shorter timeline. As a result, most predictions underestimate the impact and overestimate the time to completion.

Since most human action and interaction now happens digitally, we leave vast trails of preferences, interests, communications—not to mention our deepest thoughts, hopes and fears—where they can be gathered, analyzed and segmented. Because of this, social is becoming much more specific and narrow.

In practice this extends not only to how we approach digital marketing but also how we define user and customer personas. Should there be sub-segments to our segments and should there by sub-sub-segments to our sub-segments?

Information security is an expensive game of whack-a-mole. Each new threat creates a new technology response that is made obsolete by a newer threat. Perhaps what we need to do is to view information security from an entirely new dimension. Perhaps we should stop retaining any data that identifies anyone. How then do we transact with a customer if we do not have their information? Perhaps by asking for their permission at the point in time when I need to transact with them. This is one reason we are taking our first look at technologies like block chain for identity management.

Venture capital at the investment Level

As I reviewed how portfolios of the venture capital firms have changed in the past few years, I was amazed at the level of churn. Companies (and, in some cases, technologies) that were hot two years ago are no longer around. From this I have learned a few things.

  1. This is all moving very fast—and so must we.
  2. We will sometimes make a bad call on a technology or a vendor – just like the venture capital firms do. When we do, we will pick ourselves up and move forward – just like the venture capital firms do.
  3. In anticipation of the pace of change and the potential for missteps, our architectures and processes should be loosely, rather than tightly, coupled. We should expect that we will need to replace vendors and technologies nearly on-demand, and that is much simpler and faster if we do not have to break apart tight connections.

For this past venture capital visit, my executive in charge of client services participated for the first time. I knew the visit was working when he said, during one of our breaks, “Niel, I have no idea how your teams do what they do, given all that is going on.” And later on he added, “I need my teams to think differently about everything that they do – seeing what others are doing and what is available tells me that we are behind.” That is just the reaction I was hoping for, and it makes me feel less haunted.

From manufacturer to technology2.jpg

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