Episode #11: Leadership in a post COVID-19 world with IBM CTO, Rashik Parmar

Computers now have primary control of critical vehicle functions.

Welcome to the IBM Keep It Simple Technology Podcast, where each episode we discuss technology, but in a simple way. We keep the explanations simple, but what we spend our time on is emphasizing what this technology means to you and how you can best utilize this technology for you and your business. Your host, as always, Thomas Anglero.

Welcome to the IBM Keep It Simple Technology Podcast. I'm your host, Thomas Anglero, Director of Innovation at IBM. And today on this amazing episode, we have a guest that everybody's going to fall in love with, right? Rashik, everybody's going to fall in love with you. We have the CTO of IBM Europe, none other than himself, Rashik Parmar. Rashik, are you there?

I'm here. Yes. Hi, Thomas. Great to see you.

Likewise. Likewise. Rashik, I think that's about the only joking I'm going to be doing in this episode of this podcast because we have some extremely serious stuff to discuss. Because I'm going to jump right into the most important thing. And that is that today we're in the middle of the COVID crisis. And you know, I reflect on that where I say today we're in the middle of the COVID crisis. The question is, when are we ever going to get out of this thing, right? This thing may go on for a very long time. So, what we're going to talk about today is relevant for pretty much forever. And the question I really want to start off with you, you as the CTO of IBM in Europe, you meet so many amazing people. You have insights from all parts of the world, all different cultures, aspects. You see what's working, not working. So, where I want to start off with this is what is it or how is it? How is it to be a CTO today in the days of COVID or at your level? How is it to be a leader today in the days of COVID or after COVID? Let's just start there because other people listening are asking themselves the same question. They don't have the background. Nobody has that experience. So they really need the insight. What should they be thinking? What should they be doing? Yoshik, the floor is yours.

Yeah, so I think the first thing is you said it absolutely right. We're into something which is we've never been there, right? Even going through world wars, going through other situations, this is something which is completely unique. And when you're faced with something totally unique, people tend to go through some common cycles. The first one is kind of denial. It can't be that bad, can it? It's just another, another influenza. Is it that bad?

Yeah.

And after you get through the denial phase, you get into this phase of realization that, wow, this is serious. And you've only got to look at video of people in the intensive care, how they're being kept sedated on their fronts, being ventilated, knowing that many of those people in those intensive care units will never come out. And there are They are losing their lives alone in those environments. They've got people coming with masks, can only see their eyes. That whole image of being inside intensive care is— I mean, horrific is not the word. I mean, you see things on movies. This is just unbelievable, right? And so once you get to that realization, that this is real, the next phase is grief. And people respond to grief in many different ways. And the role of a leader is to create space and comfort around that grief period. And you've got to allow people to let their emotions and their, their feelings really get to a point where they realize, and often they don't even realize that they're grieving themselves, right? So, as a leader, you've got to help them through that process. We can't use work as an excuse. Your work is there because you are there to deliver some value and outcome. And I think there's different sets of response, right? So, So you see one set of response from people we have around the world who've got 3D printers and say, hey, look, I can print 3D printed protective masks and I can do my bit for this, this, this crisis. Or people who've got data skills and can build a chatbot to really relieve the pressure on online services that are trying to respond to these crises. Or people saying, well, I can analyze the data, I can provide better insight to help you take those decisions, right? You're using the right kind of algorithmic skills. And then, and there's people saying, well, I can use my technology skills to build an app to track this going forward. These are all, these are all good responses, right? Or there's the, there's a humanitarian response, which is people who are stuck in their homes, elderly people who are not allowed to go out, how can I go help them? So there's, there's all these, what I call everyday heroes are coming out and really supporting the folk that are in a really difficult position.

And we need them, society needs those everyday heroes.

Absolutely, absolutely. And remember that this is— the numbers, although on the face of it look really small, there's only what, 2% of people get into intensive care. Of the people in intensive care, you have 30 to 40% will die. I mean, those sound like relatively small numbers. But when you see it at the scale of society at large, you've got 6 billion people, those small numbers become very big numbers. And it's not just the big numbers, it's the effect on the healthcare service to be able to cope with those numbers. We just don't have enough capacity in healthcare around the world to be able to achieve that kind of herd immunity. We can't do that. So, so we're talking about flattening the curve, slowing down the pace, social distancing, things which, which we have to do to get through this, this initial phase.

And as leaders, they're aware, you know, if they weren't aware, they're aware of that now and they're struggling. They see that the world doesn't have resources. And then on an individual basis, they're looking at themselves. They're going, what can I do?

Yeah, exactly, exactly. And, you know, when I look at the IBM leaders, so I'm working with the senior leaders in the company, their number one priority is the safety of our employees. That's, that's their top priority. The first thing that we have on all our internal discussions is, are we keeping our employees safe? First question. And so you'll have seen that we've been incredibly cautious in taking decisions on closing offices and doing some social distancing before governments have done or countries have done because we want to be ahead of the curve in this. And that's really, really important, right? Because our first priority is our employees.

And that's 350,000+ employees in 120+ countries around the world, right? Exactly.

Exactly.

That's the scale that we're talking about.

Exactly. And you look at those numbers and the numbers of cases that we've had within the IBM company are relatively low compared to what's been happening in society at large.

Right. So, so to summarize so far, what what you're saying is that even as a top leader in one of the biggest companies in the world in terms of number of employees, number of countries that you have presence in, that very first thing, the very first thought that the top leadership did was take care of our employees. Understand that they're going through the different phases, right? The denial, the acceptance, and then the grief, right?

Yeah.

So, I find this incredibly interesting. And my reflection is that I think other people are reflecting too who are listening now and saying that here's the CTO of IBM Europe and this guy is really emphasizing on the soft stuff is what happens in this incredible moment in human history, that that's how you take care, that's how you lead is that you primarily focus on people, soft stuff. Compassion. That's an amazing statement coming from a person like yourself. But please keep going. I think that's great. I just want to emphasize that.

No, no. And then the next phase is, okay, so now we've protected, you know, really looked after our teams. How do we help our clients? Right? Because our clients are going to go through the same kind of cycles, right? How do we share our knowledge and experience and expertise and what we're doing and stay connected because we might learn from them, but we can also advise them, right? Because it's about companionship here as well as a business, right? Because a lot of our clients are our friends, right? And that authentic friendship and trust that you build across that relationship is something that we want to protect. So, we've been thinking about a lot of those things. And then there's the things that we can do. So, as we go through this crisis, we have capability to be able to support society at large. And that might be in building those apps, building the different technologies that can come to terms with remote working. Now we have to play out scenarios, right? So you can't make decisions without having some kind of hypothesis and having some kind of scenarios, right? So the scenarios that you might play is, okay, well, when do we think governments will be releasing the social distancing and the restrictions that are put in place. Will that happen in 3 weeks, 6 weeks, 6 months? You know, there's different scenarios. We play out those scenarios. And then you start to say, okay, when they release them, what's going to happen? So what's going to happen to the number of cases as you start to release that? And what will they do with it if this case starts increasing or decreasing? So we have to, we have to do that kind of scenario play out and then look at through all of the possible scenarios, which ones do we think are most likely, which ones are least likely? And then, and then based on that, let's take the decisions recognizing that our first priority is our employees, employee health and safety. Second, second priority is our clients. And then the third priority is to make sure we stay business, you know, that we stay profitable and continue to deliver the business. And that's how we, that's how we're thinking through each of these decisions.

I think that's great. You just put 1, 2, 3. That was fantastic. Then let me add another perspective and I'd love to get your feedback on that. And that is that so we're up to the business aspect, right? The one is taking care of the people, society, the business. But here's the other one. What is business? Right? So what I'm saying by that is let me be very clear. So the people listening and that is that what the measurements you had pre-Q1 2020, pre-COVID, let's say, right, of what is a good quarter, what is an acceptable margin of profit. Those numbers, those variables, those algorithms, those formulas that were built into your spreadsheet, that's no longer valid going forward. Those measurements are off. Could you talk to that? And I think the reason why I want you to talk to that is because A lot of top leaders know that. But it's really hard to say that now when you have your next board meeting. They're just saying that the last decades that we built the company on, all our beliefs and our foundation, we have to rewrite that. So, Les, I would love to hear your perspective on that. And so, other people, so the other leaders listening, you could help them to rewrite their foundation of what is a profitable, what is a revenue model that looks like today. Is it okay not to emphasize the revenue model so much because people are dying, you know, I just— please, you go anywhere with this.

Yeah, yeah. So, so, you know, ultimately, um, each business has its own, um, profit formulas, as you say. We're incredibly fortunate in that, um, we have a pretty good, um, financial reserve that we can draw on, um, and, and we look at the level of resilience of the business. So if there's no money coming in now for the next 1 month, 2 months, 3 months, what would that do from a financial flow perspective? How much can we pay employees, pay for the buildings that we have? You know, so, so we're looking at all of the costs and saying, how do we slow down those costs to give us as much resilience as we can going forward? So any expense that we can control— now, bear in mind, people at home, a lot of the travel expenses have been cut back. So we've got potential savings from that. So that changes part of the curve.

Yep.

At the same time, whilst customers may delay or stop some of the spend, some customers are having to spend more in other places, right? So you might not get some revenue from travel companies because they're not going to spend very much, but some of the hospitals are spending more because they need more IT and, you know, we're there to help them, right? So you have to shift the resource and the projects and opportunities to where the money is potentially going to come from and support the opportunity to emerge. And that is about rapid response. It's about building on trusted relationships. You know, some of our teams have been in the hospital working with the local hospital team almost 24/7 since this crisis happened. And they've been there as we've set up these, these temporary hospitals. We've been putting IT into those hospitals to, to be able to support the care provision that's created these 1,000-person hospitals out of nowhere. Right. So that's, that's That's completely new revenue. Nobody would have predicted that, right? So you've got to try and balance where you can get the money and where you can save and make sure that you hit an appropriate profit. What you can't afford to do is make sure that you're not making the money that you want. At least have a level of profit. You don't want to be going under, but you've got to not go too much into your reserves. So that's the kind of overall equation that's being done at the corporate level. And then each of the markets, each of the geos is being given a set of, you know, must-make targets and helping them think through how they do that. And what we've looked at is said, okay, so in this situation, what is a, what is a government going to do in responding to COVID? What's a, what's a bank going to do? What's a telco going to do? And we've provided a set of offerings At the same time, we want to be compassionate. So we're providing things free. So some of our services like Aspira, some of the video technologies, we made those free for the period because we've got to be helpful, right? We don't want to be using this as a way of screwing somebody when they're down. We want to be helpful at this stage, build those trusted relationships, knowing that in the future when things get better, that trusted relationship will turn into a profitable relationship. That's what our hope is, right? And at the same time, you've got to play out those scenarios. So there's a balance between putting too much risk into the system that you become unprofitable versus being compassionate and supportive in the right way. So it's a very fine balance that we're trying to drive. But ultimately, We are very fortunate in having a very resilient business, right? And, and you'll, you'll see the quarter numbers. We— I don't know what the numbers are, and, you know, the, the key people working through those, but I would expect us to post, you know, relatively good numbers because a lot of our business is annuity business. It's not, it's not transactional business. We have a chunk of transaction. We have a lot of it is ongoing long-term contracts. And so, that gives us a lot of resilience that others don't have.

Yeah. And let's just— that's it. I want to stop you right there just because I want to jump on that one point. And that is others don't have, right? So, you mentioned something and I'm tying two dots that you mentioned earlier. You talked about grief earlier because I thought that was beautiful. And then a moment ago, you said that you have to keep the revenue going. When you mentioned grief the first time, you mentioned grief in regards to COVID and the horrible things that are going on. But I reflect as you talk that these companies, the leadership are going through business grief at the same time they're going through personal grief. And I reflect to myself and go, wow, that's a double whammy. Yeah.

Right?

And you're not thinking straight. Because on the personal side, you may have somebody in your house or somebody you know, so your neighbor or something like that. You go to work, that's another grief. I mean, that business leader is not in the best situation to make business decisions.

Absolutely. I mean, if you take any of the travel companies, their business is completely decimated right now. And if you're having to go to work and explain to somebody I'm sorry, but we can't employ you anymore. And at the same time, knowing full well that they may have relatives who are dying in the hospital. I mean, that's just heartbreaking. You can't imagine that scenario. And by the way, I've been talking to people in airlines and travel businesses who are in exactly that position. I mean, these guys, the pressure and stress that they've got is unbelievable. If you talk about mental, mental illness that comes out of this, we haven't, we haven't experienced that as yet. We don't really know what it's going to do to them mentally, and, and that will turn into other forms of physical societal issues that we haven't played out yet.

Can you share any story without revealing any names, just because people relate more to stories? Do you have any specific stories?

Um, yeah, so if I look at— if I'll talk about one of my, my local neighbors actually, rather than a client, and And, you know, she was working as an airline hostess and she's basically lost her job, Brett. So she's been told that they won't employ her now. And at the same time, she's got issues with some of her family who are working in the hospital in the frontline in the care sector. And she is absolutely terrified about what could happen to them. How they might, you know, they could quite easily contract the virus. So she's in a really difficult place and then she's got nobody to really turn to and talk to, right? She's in the home, she's got kids who can't go to school, she doesn't have a job to do. You know, luckily her husband's continued to be employed and supporting the family, but that's a really difficult position.

Yeah.

I just wanted to get real because I think stories are so important because I think by the time people hear this podcast and going forward, all of us can have multiple stories. Of course. So going back to— let's give everybody a little emotional break, right? But it's— well, IBM, and this is what we do. We talk about real things. And I think it's important to talk about the emotional stuff. But let's talk a little bit about technology. I'll give everybody a break. Going forward as a CTO, what type of— does the talk about technology in the office change, or is it business as usual, or the word business as usual probably should not be said again for quite some time?

What do you— Yeah, so I think the first thing is that Clients are looking first and foremost at resilience, operational resilience in its broadest context. So when we go forward, we're going to be looking at businesses and saying, okay, for this business, how do we create sufficient financial reserves and technology to keep them running if this virus was to happen again? And that might be remote working, it might be additional security, it might be increased automation, more use of cloud. There's a whole bunch of things that will play out. And you can look industry by industry at how they will do that. And obviously we've got a lot of work to do to make sure we're ready for that because some of the countries have started to relax. And we know the Nordic countries are, I think Denmark and Sweden are gonna be starting to go back to normal very soon. And so we kind of learn from those and say, well, how are they coping with it? The places that are much harder hit, like the Italys and the Spains, how they recover is probably going to be more like the way China's recovered. So we're looking at the experiences from China, looking at the technologies that they're looking to buy and use and exploit to support the business. And I lump it into 3 broad categories again, right? There's a set of things which is survival-related. So how do I use the latest technologies and technical thinking to make sure my company survives through this crisis? And that might be more remote working, that might be cost reduction, that might be using cloud to be able to drive applications that I couldn't do before, using chatbots, all that kind of stuff. Then there's another piece of work that happens very soon after that, which says, look, I got a little bit carried away with my business in the past. I've got to go back to what's core. I've got to simplify my business to really work on what's core and what really matters in the marketplace. So that kind of simplification is the next set of responses that we see that will come downstream. And then the third set of responses is, look, I'm actually really lucky. I've been resilient through this phase. I've got something which is unique and special, and it was important before, but it's now super valuable. So I'm gonna use that and really help society and superscale what I've got in the business. And that might be, I mean, think of someone like a Zoom as a video conferencing technology. They've got something which has mass need right now, much more than they've had before. How do I superscale that and start to become a mega business on the back of that? And that's just not just video providing, there's a whole bunch of businesses that I think will emerge, which will be unique for each of the industries, whether it's around airlines and how we do social distancing in airlines, it might be around banking and using banking in different ways to support different forms of care provision. So, there's a whole bunch of things. So, each industry will have its own superscalers. So, I look at it in terms of technologies to support scaling, technologies to support simplification, technologies to support superscaling.

So, to simplify that, which was really good, I would say that there's a reset going on. And it is okay to reset now where before it probably maybe wasn't so appropriate to say we have to redo our company. We have to look at things from scratch. We have to whiteboard it and clean slate. All that. Today, it is appropriate. This is the time for the reset. And that's number one, you said. Number two, you said. Is in my words, be more innovative, right? What are the new things you can do? What new technology you can leverage? And then, the last thing where you were touching on is just this open mind point of view where the innovation will lead to. Is your new core business, the spin-offs from it are going to lead you? For example, you said Zoom is a video company but it's more than that. Your core business where you're at today is not where you're going to be tomorrow. Open up, expand, allow the reset to reset you like a leaf in the wind. Let it blow you to where you're destined to go versus saying, that's our business and we only do that. That's not correct anymore. This is like an incredible time where you could do anything you want and go anywhere. And so I think you said it beautifully. I think overall everything you said in this podcast was beautiful. And that is because you talked about— and remember, I think the people out there got to realize that you are the CTO of IBM Europe. And you started off strongly talking about people, compassion, love, really taking care of the employees, taking care of your clients. And then I asked you and I challenged you, said, well, if you're a company, what are the things you talk about in the office as a CTO? And you immediately said, it's okay. You also said, forgive yourself, allow to reset your company, be more innovative. It's okay to restart. Did I capture all that correctly?

Absolutely. Absolutely. I think one thing that we didn't talk about, which is fundamentally important for all the businesses.

Please.

And, and that is about staying close to your customer, right? Try and live in your customer's shoes because that's the only way you'll understand what matters to them and how you can really help them. And, and I think we have to think about being in the customer's shoes now because it's very different from what it was just a few weeks ago.

And there's no time limit about what the customer is experiencing. So, if I may, I'm going to flip that over and I'm going to help everybody out because I get this question quite often. And people ask me, Thomas, you know, when I call my customer today, what do I say? And I have the easiest answer. I said, turn it around. If your mobile phone, if your phone rang right now from a vendor or somebody, What would you want to hear from them? You don't want them to say, hey, I want to sell you something. This is not the time for that type of talk, right?

Correct.

What you want to hear from them is the first thing out of their mouth is, is, hey Rashid, how are you doing? How's your family? Is everybody okay?

Absolutely right. Yeah.

And I tell everybody, say, listen, the phone calls you make to your clients or whatever category, whatever you want to call them, your customers, you spend 95% 95% of that time talking about them. That's all that's important. You take care of them. It's, you know, a friend, a lifelong friend. You only call and take care of them. And that's why they're a lifelong friend because you took care of them. You want them to be a lifelong customer, you take care of them. I think it's beautiful. I think people have to understand that, Rashid, that you're the CTO of IBM Europe and this is the message you're saying IBM is doing. And I think that's very powerful because in these times, You know, people at your level, this is amazing that you're saying this publicly. So I thank you. I'm really, I'm smiling, you know, you can't see me.

There is no other way, right? We cannot be successful unless our clients are successful, right? And if we're living in our client's shoes and we're really thinking about how do we help them get through this, be successful as businesses going forward, then we're nothing, right? It's not about being essential. It's about being there, being somebody who they will turn to. And by the way, the other piece is at this time, you've got actually more access to clients than ever before, right? And you don't have to have hour-long meetings. You can have a 5-minute chat of WhatsApp.

Yes, yes. There we go.

And that's all it takes. 5 minutes.

Quick.

I hope everything's okay. I hope your family's okay. If you know the wife's name, the kid's name, just put the names in there. Very personal, right? And if there's anything I can do, you know where I am. That's all you've got to say.

That's perfect. I'm not going to add anything to that. Again, perfection. This has been, in Norwegian, we would say koslig, this warm and comfortable type of conversation. I really, really, really appreciate you taking the time to share your views from all across the world with everybody, because this is the kind of content, information, and tonality that people need during these times. Right? It's okay to take care of each other. Rashid, any last words you'd like to say to everybody around the world?

The only last word I would say is, if you start with people, then you will be there for the future. If you just care about the technology, then you're going to be history.

Well said. Ladies and gentlemen, Rashik Parmar, CTO of IBM Europe. Thank you so much. I am Thomas Anglero, Director of Innovation for IBM, and I think I am blessed to have spent the last half hour with you, Rashik. Everybody, please, uh, Subscribe, listen. Listen to the podcast on Spotify, iTunes. We're everywhere. Let us know what type of content you want in the future. And we really appreciate you having us. Rachid, thank you again. And I hope to have you on the podcast again in the future.

Thank you.

Thank you, everybody.