Digital Innovation at Dow
welcome to ovation a weekly conversation with people. Who are shaping the technology landscape. I'm Peter Hi. President of Meta Strategy Advisor Technology Executives Forbes columnist author and your host each episode of Techno version features insights from top executives thought leaders at the intersection of business technology and innovation. If you like what you hear we'd be grateful that you give us a rating on itunes or through. Whatever other sources you use for podcasts. Please subscribe so you. Don't miss a thing thank you. My guess is weakest Melanie Kalmar bellies the Corporate Vice President People Formation Officer chief digital officer of dower the sixty billion dollar one hundred twenty three year old Chemical Material Science Company that was reporting twenty nineteen went down do point split into three separate to publicly traded companies in this role. Melanie is responsible for driving the global strategy for Information Technology and digital capabilities to advance Dow's growth in business strategies. He's also a member of the executive leadership team in leads. The Dow Services Business which provides services in support of Dow's merger acquisition strategy. Melanie joined Dow in nineteen eighty seven and she's held several. It leadership positions within the company in his interview. Melanie recaps the merger with Dupont. Subsequent Executive Shuffle and ultimately spinoff resulted in down to other publicly traded companies. Were Tiba Dupont. The new Taoism Material Sciences company heavily invested in research and development in collaborating with customers to drive innovation. She notes that murderers opportunity to investment future capabilities. In the Dow invested heavily in its digital transformation during this period we also discussed the expansion of role to include the CPO title. Three anchors of Dow's digital nineteen strategy or interest in artificial intelligence endows artificial intelligence competency center at a variety of other topics. Melanie Kalmar welcomes his second ovation. Great to speak with you again. Thank you for your great wonderful. Well so melanie what a consequential year twenty nineteen was for you And perhaps biggest of the consequences was The spin to create. What is now the new Dow and I wonder if you could take a moment. Just reflect on that change. What has been widely viewed as a successful spin and talk a bit about You know how that was undertaken. Sure it was a crazy or I'll say that in this interesting because here we are in February and it was less than a year ago that we knew Dow so it started with The merge with Dupont which was about one hundred twenty billion dollar merger and You know we basically brought companies together kind of shuffle. The deck and created three very off separate Separately traded companies and Dow was the first to spend which we spent out in April and we fund the Tampa. Which is the company out in June. Which locked dupont? Which is the Specialty Materials Company? So the Dow is Material Science Company Where we invest heavily in our a D and we're very close with our customers to innovate with them on Material Science so pretty very huge undertaking. We focused on that for about three years in the making. And you know like I said we we Reshuffled their portfolios made sure that the best owner have had the right businesses. We spent the time separating systems so it was unique in that need going into the murder that we work that we were going to spend the three companies so we didn't integrate our systems but that's not to say that there wasn't a lot of work to separate the systems pieces of each company kind of going in three directions. So that what we spend time. We also used a an opportunity to really invest in our digital transformation. We when you do an manet in. We've done several emanates over the years. You typically have the opportunity to to invest in in what is required to make that change and instead of just making changes to enable only stand. We've leapfrogged a few areas in really invested in some of our platform some of our digital platforms. That would help you know fuel the future for the company so if you think about You know key areas that we invested in our HR PLATFORM. We also invested in a business planning platform because we were changing our portfolio. So much and as well you we have invested in our inner digital commerce platform and I can go into more detail on those but those are kind of three key areas that I think provided good foundation and we were able to work on those like I said as part of the part of emergent spin activity. So we've also been very focused on off progressing. Our digital in our strategy in in that strategy is really Anchored on three pillars. The first is working and being closer with her. Customers of the second is making work. Easier for our floyd and then the third is really improving. I'd say speed and really how we were because our objective is to become a more real time. Dow On if you think about historically I think we've all kind of designed and developed our our homework processes but I I refer to it as the way we work based kind of a functional silos and handoffs in a lot of batch processing historically in what. We're really focused. On is the end to end everything on its side in driving so we can be a real time company where we're using the information real time. In collaborating customers are real time. Justice is really fun and exciting things. I think you know coming out of the spin. Like I said we have even been the new Dow for a year but What we like to talk about is the fact that the new houses digital now and you know like I said we've made some some big investments are the platforms that we've delivered and were were really working like Deepen our relationships with our customers and really help them. Innovate in bring really that next generation of products that suit their their complex changing needs in the environments that they work in and especially in our industry. You know that the whole The whole space of recyclable in endurable products is really important so were also focused on technologies in driving a different way of working Using high throughput research I would say at a different level than we've ever done before you know analytical sciences in modeling and we've been able to really reduce our commercialization times by two to three acts last capabilities that were focused on so upon. Stop certainly sounds like I'd love to delve a little bit. Further into your strategic pillars. You talked about working closely with customers. Making it easier for employees improving speed and how we work. I'd love to actually. Maybe if you wouldn't mind addressing each of those in a little bit more detail as to how you go about doing those things in the in the role that technology digital play in enabling each of those being closer to our customer you know if you think about the kind of industry that we're in I would say historically we were You know assets or US kind of company we we pumped as much product out of our assets and pushed it into the market. And what we're finding is as a material science company there's so much that we can innovate with our customers. So we've come you know. Working with our commercial organization. We actually started serving our customers in really developing a customer experience index for or down in our customers really view us which is totally different than anything we've done in the past and we're driving that really what the customer needs and how the customer sees how to to line out our our agenda and our priorities digitals and you know some of the feedback that we heard You know one of the most difficult areas that are customers Have found in doing business with us in our you know when they have a quality problem and if they have you know have to return cry and you know just the way we are set up. We weren't organize to you know. Make that more streamlined and quote unquote enjoyable for customers. So if you think about you know we all probably most of us have have had the apple experience and that's what we talk about. Inside of Dow is how we make it seamless and easy for customers to interact on those. You know we've identified the key touch boys that we have with our customers in. Of course you know the innovation. He white the getting a product to our customers when we say we're going to are all very key that we're focused on as well but that was one that we could address pre-quake lay in and really change the conversation with our customers so when we talk about being closer to our customers or focusing on the customer experience that's what we're talking the employee experience is you know. There's there's our workforce out there that's coming in to the working world. That's ready for the workforce of tomorrow and you know the use of of digital tools and capabilities and processes that are less happy and less Garner's focused so You know that is one of our second key. Drivers is always looking at from you know any project. We run any change. We make number one as they're going to be better for the customer number. Two is more enjoyable for employees employees. Because we want their work to the easy thing we want you know what they do to be effective and and for them to enjoy their day at Dallas while and not the final one is around. I would say you know working at the speed of business Really changing how we work again. That's that's looking end. And at how many execution were forgetting about the organizational boundaries or the or charts and looking at. How do we again streamline what we do From the view of the customer not necessarily the view of what would make our life easier. And what what would make you know. A functional organizations like easier Attala. We having at that together to deliver you know as one Dow to our customers so we're really focused on like I said becoming a real time Dow so we're not doing a lot of stuff in the background or in the back office to to make that interaction. Work that you know that interaction can be streamlined. Directly to the customer we can commit to a delivery date you know online with our customers so if you if you wind that back that's a lot of changing again how we look at. Howard doing our work. It's about changing. How jobs are structured in the company but as well as looking at something that maybe ernest bond but you know getting into the details of the data and how we maintain our data and we have our data structured and set up and maintained so so we can do real time and not to do a lot in back office so I think some really exciting Themes what we try to do. We are it strategy with those themes of the company while in. I think it's really nice because it's not you know. A lot of technology gets its three simple themes that we can check everything. We're doing against in the company and everybody can relate to to what we're trying to work on both internal and external one of the things that's also changed since the last time you and I spoke at least on the record. What is operatives of your responsibilities? So you've been enroll as chief information officer for about three and a half years and borough a little less than two You added the e chief digital officer set of responsibilities to those and I'm curious What what changed. What what was the impetus for the aggrandizement of the title in how you see that translating the two sides now with your role. Yeah I actually am very fortunate that the CEO asked me to take on the officer role having already having the the CIO role. Because I looked and I watched a few other companies were they named someone else other than the CIO CIO to be the chief digital officer in it seems like another it ish organization starts popping up in you know seen some conflict so. I'm wearing both hats so I guess I can argue with myself. I do think I'm fortunate because I do wear both hats than you know that the CIO role is You know there's some traditional things tack things that you just have to make sure work in a company is the CIO a lot of infrastructure roll-out of base capabilities. That you know that every employee uses that she digital officer all I think really brings you know credibility to bribing the change the transformation for the company in just the collaboration that You know I am. Accountability for driving is a part of the CEO role and chief digital officer. But I'M NOT GONNA I'm not GonNa make everything match magically become digital on my own is through just incredible collaboration. I would say collaboration like we never seen in the company before you know across You know the the it organization our businesses as well as the it organization with all of the other functions in the company to make this flow. Send all You know the it's really also given me an opportunity to Have have a say in in those partnerships and and bring different ideas to the table where you know traditional thinking may not take you down at digital path for some of the challenges that we have so so. It's it's been a fun journey so far and like I said I just really appreciate being asked to take on that role in bribes that you know the digital change for the company and that's great as you say a great sign for the perceived value by the rest of the team as to what you were doing cio. I'm curious how does it filter down into the team? Now as you're thinking more from a digital lens and in that broader sort of perspective you just described are skills that are becoming more important that you're training bore or hiring for as the case may be how does that filter into the organization absolutely in it it's It filters into the the whole each organization not as the night station but but the whole company and but it starts with the it organization and that's one of the things that You know I- I launched right away is you know when you think about. It skills Halford solid technology skills but from a digital standpoint comedies that we had to build out in the N. T. Organization. We send a good part of last year. Really focused on this action in really knowing really knowing the businesses that we operate in the businesses that ran and actually that became a PRI interesting because needed that off the while we went through this day. Transformation without you know brought new business into our polio business. Move to impossible just everybody had to regroup and reorder stand. What is the dollar business? Portfolio sport is one of the markets will really try to go after and serve in infiltrating. Say so you allowed dot com just understanding the businesses and as well as you know different disease around you know being agile changing hobby clearly. It see all too agile methods now of reason. Educating businesses falsely. Nothing's too because again. It's all become one team and you have to work differently than having pass no more. You know the business or auction throwing a request over time figuring now is all done in partnership you know clearly you know what is the problem. We're trying to solve lambs. Which Larry her own dressing challenge? That's interesting you've mentioned collaboration. In its importance its growing importance in the modern age one of the areas which are in essence alluding to I think also is this convergence of it and ot. And I wonder if you could take a moment and described the rationale for its combination as well as the value you see deriving from having that closer relationship between the two disciplines. This is a great conversation to be had. I think it's one of our biggest opportunity areas within the how and you think about it in the digital age kind of I call it a natural connector the the type of work that we do what we're trying to change the company. I T becomes kind of hard or the epicenter of of what we're doing you know bringing you know. All of our function together is is really important. I would say harvest more together than separately. And that's exactly what we're doing in the IT OT sunny if you think about how got over a hundred manufacturing sites all over the world. We've got very strong manufacturing organization out very technically still an historically. We've focused on how we improve that kind of plant by plant site by site. And so we built skills in Hockett surrounded company in our operations technology space And just the opportunity to bring the two together because they're good technology skills in operations. They're very good technology skills than I t and bring those together and having the two groups together we found just some huge opportunities to earn each other and be able to accelerate what we're trying to do by working together So the operations team fully understand no process control all they have different I would say even a a higher level of understanding around reliability me ninety has reliability targets but nothing like old she has on the Iky side I mean we have very very good testing techniques We have a different view on how to implement in in more by accompany white program but we also recognize through our differences in any APP to understand those differences in how nimble from an IT standpoint. We typically deal with enterprise systems. You can plan a big program and you can have a wealth plan weekend in you can roll out earpiece theft pretty simply by Kellyanne in the OT space you have differences that many of your manufacturing sites a lot of that just because you build things over time technology changes over time or because you like Dow. We've had you know years and years. Of of emanate we acquired companies. You bring in what they have. You don't operate everything all at once So you can't just have kind of a well-planned weekend where you implement changes across hundreds of sites on the weekends so there are differences in learning from our differences. Were you know we're learning from each other and like said we've been able to find several areas that we can accelerate by bringing the Seattle? That's great that's really great. I it seems like as I think about the various things that you've ushered in the changes that have been made across your tenure He did the spin obviously peeing Perhaps the biggest of the changes but even just sort of the differences in Iran. Tation the augmentation of your responsibilities of this convergence of it ot the the greater degree of agility. So much of the seems like you. Really thoughtfully used. The change suggested by the spin as a mandate for change. Because change is difficult usher in but there's a recognition. I would think anyway. Look we're we're now a new company. We need to do things differently. it seems like you've really Taken a thoughtful approach to recognizing that these sorts of opportunities mandates for change will come every day and so Really kind of leverage that to the hill is fair. Absolutely if you think about a you know we're a hundred and twenty three year old company and we were reborn less April so we absolutely took advantage of. You know. Being spun out is a new company. You know we were on the New York Stock Exchange in rain the bow and that was an event that we all celebrated as employees Dow and from a digital standpoint. Our our our path forward that the new Dow is going to the digital dial. And KINDA set a couple of times that removing from a chemical company that does digital to digital company that does material science so it's just a very different mindset in in absolutely used that that opportunity to celebrate in the you know highlight that the Dow was going to be different to our employees. And you know we gotta laundry ahead. We all talk about this digital transformation. I don't think I don't think we're ever done. It's an annoying activity so we got a long ways to go when Tom People making a good half way in the US the amount and you mentioned that the owner of circle back to something. You mentioned very early on Melanie that was you you modernize you also use the opportunity to modernize a variety of technologies. That you're using and I can only imagine that you were setting a better foundation to be able to implement a lot of what you described so as opposed to a investing in new innovations that are on an antiquated foundation. You're now thinking about. How do we get to modern technologies? Modern MODERN PRACTICES. So that as we do that we're building on a much more everlasting foundation something. That's a bit more leaning towards future. Proof is that is that fair. Is that how you thought about? Some of the modernisation activities undertaken race some of the platforms. Flint's wait we also modern life our network at the same time just you think about. We're we were splitting into three companies. I mean we have big manufacturing sites and you don't just pick up and move a plant somewhere else is sitting in the middle. Love your Site and you know we needed to get different networking capability into those sites. That was let off to you. Know Dow or for Tab our now in the pond and so we use that opportunity out grade. Some of our faith infrastructures. While en to start planning or more wireless in actually even by G. L. You know some of the technologies that are coming. We made some decisions. We grow In architecture that would help us get to the future and again you some of that investment to make sure that we could You know put the right on the infrastructure in place like I said we also Pity Johnson keep platforms Our whole business or oil change sore business planning platform we meet a previous investment in. And you know actually were already starting to see some of the best bits from a working capital standpoint Manager working capital better by using that platform we pointing. Hr Platform Place call based We want to talk about pender. Surmount he went with workday. We did you know. Pretty weak global massive inclination of Workday last September and. We're already seeing benefits there. Were you know that's going to help us Much more agile organization. WanNa be in. You know better visibility to kill empire access information about people where you know when we have a challenge. We can now start pulling the people with the race still than capabilities and again like I said not worry about where they're at Morton's ation or not miss people. You know the gems that you have on your organization. You have a challenge that you may not even know about that. Platform is really serving to help us. In in a course with these forms were were changing. You know how we do work in changing the organizations in the processes around how we execute working series of the same time nor talk about our digital commerce platform. We put that place as we were working on the the separation of the connectivity. Our platform is really designed to meet at the intersection of the three pillars. That I talked about that interaction with customers who who are poisoner action in two more real time. Dow of I being able to Really execute commerce online real kind in the back office nine. The scene we also through the collaboration and I talk about collaboration. Like we've never seen at now. We were able to totally uplift. Not only the technology the underlying technology but also the window that our customers products in who we are on our dot com platform needed that in less than nine months last year at the same time that we're working on a stand we were working on this and you know it was. We want from a company that had or a hundred different internet use ways that he could see our business in who we are. He had a a a doubt com corporate standpoint but our businesses have very different views. All different terminology all the different structure and we brought that all together in a very short time because we're working very differently Atlanta projects. But how do our day to day work? So that whole Platform IN DOT COM or a couple more examples. And of course we're doing a lot of things in the fashion space. He last time I talked about the work with wrong. Relied to really make our employees work. Safer for them Doing several other areas Working with What I would call green employees closer to them she. So were you know large in capability that we can bring wool experts in To saw problems while they removed. So that's fantastic and you're already in fact a leaning towards where. I wanted to go as well which is trends that excites you as you think about the future. I would love to love to hear what other things are kind of on your roadmap as you look to the future absolutely. I mean this whole concept of Artificial intelligence been talking about Ai. For Awhile I think there's a lot of confusion out there of what it is related to perform of analytics. Learning is at a I. Is You know their true out there. I think you know for my manage point that one is the most exciting tourney in just the possibilities that it can room to a company like mine We create Just just in our manufacturing sites alone we create tons and tons of data. I would say it's in the neighborhood of twenty billion data sets day look across all of our passions in in our ability to to do more than just you know. Process automation or reliability improvements as it has really wasn't a radar. Remind that veteran. How can we leverage a start seeing patterns to help us understand that data batter? And you know we formed what we call an artificial intelligence The senator or with the now which is another way that we've driven different. Collaboration Company is it's a it's an orientation that it's not an organization or chart but it's a it's a group that together to really move a competency forward for honey and we've done a few other of those collaborations and I know a lot of companies do half ounce to developers together and come up with big ideas. We run a couple of what we call now. Data Science challenges which really ruth our data scientists across the company together so we scientists that sit in manufacturing this. Sit In our deeds. It is our supply gene area that you'll sit in core. It that that support the needs of our businesses. In nor- data science channel will use. We throw big challenge here packed on the very first one. We did a couple years ago and partnered with her. See at ball and we we through the challenge out there. Are you know come up with some ideas of to add a hundred million dollars to even and you know we the challenge out there we Let the data science diet data scientists self selector teams out with one rule that he had worked with people that you don't work with on a day to day basis and we got some some great ideas of that challenge impact. We know we were GonNa Award the top three in on those to go forward. We funded like the top ten projects and were already seen great progress against that goal. So some some of the things that you can do different things that you do in your company to break down the silos but also to really I mean. The ultimate objective is to progress areas. Four one is one then really focused on excited with great will goodwill Melanie. Kalmar thank you so much for joining us again on tech nation. It's been a great conversation. Hearing about the extraordinary tenure you've had the very consequential things that you've led The the spin that has developed a new Dow win some of the things that you're excited about as you look to the future so thank you so much for a great conversation thank you. Thanks for tuning in. Please join me next week. My guest will be remind. Mehta chief information officer of Vistan.