We want to leapfrog our legacy culture

Over her 25-year career, Deanna Steele has led IT and digital organizations at companies in various stages of startup, acceleration, and turnaround. Much of this experience has been in the retail sector, including VP roles in technology at Hot Topic, Express, and Ascena Retail, CIO at Ingram Content Group, and CI&DO at J.Jill.

This past June she joined Advantage Solutions, whose data and technology solutions help retailers and brands drive demand and operate more efficiently. Steele and I recently had the chance to speak at length about her new role and IT leadership more broadly. What follows is an edited version of our conversation.

Martha Heller: As a CIO, what is a key leadership skill that you find yourself leaning into right now?

Deanna Steele: Ambidexterity is a capability that every CIO with legacy technology has to possess, because of the current rate of technology advancement versus the rate of technology investment that most companies have made over time. Ambidexterity is the ability to stabilize, optimize, modernize, and simplify older investments, while at the same time carving out time, thought leadership, and investments for innovation.

Advantage Solutions has acquired 80 companies over the last 30 years. In some cases, it has made sense to consolidate systems and functions into shared services while, in other cases, it made sense to let acquisitions stand on their own for a while. Today, our IT shared services function supports large parts of the organization, but we have not fully integrated all of our more recent acquisitions. As a relatively new public company (October 2020) going through Sarbanes-Oxley, we have a pretty compelling business case for doing the integration work on those SOX-specific applications, but we cannot let that integration work take our eyes off of innovation.

How are you striking that balance?

As in most IT organizations, we have traditionally been structured around the inner workings of IT: infrastructure and operations, application support, and security. Those functions are still very relevant, of course, but we need to develop more skills in understanding what drives business strategy and bring those strategies into the IT roadmap. Here is where the ambidexterity comes in: We need to prioritize the work that drives business strategy, but we also have to deliver on what we’ve already committed to. That balance is important. If we were constantly adjusting to business priorities, we would not be able to manage our budgets or projects responsibly.

What are the capabilities you need in an ambidextrous IT organization?

One key to ambidexterity is reducing our reliance on legacy IT skills and developing one common skillset around a modern, cloud-based environment. There may be a higher cost as we move from legacy to modern and supporting both environments, but ultimately our costs will go down because we will have a common set of competencies managing one common platform.

To run that cloud-based environment, IT teams need to be even more knowledgeable about finance. When we move to subscription-based platforms, IT investments shift from CAPEX to OPEX, which is a key distinction from a finance perspective. How do we rethink IT as a percentage of total expense? Does the IT budget include technology or business enablement? It’s a complex conversation, with many nuances, so today’s IT organizations need an even stronger relationship with the finance organization.

But the most important capability for us right now is data analytics. It’s one thing for IT to produce reports, but is another thing for us to produce analytics and translate data as value. Solution architecture and enterprise architecture are also critical as we think about our future.

How are you developing those data and architecture skills?

In many companies, IT has been seen as an empire builder, with the CIO having all IT professionals report into one centralized organization. But that approach will not work in the future. Our strategy is to identify people with the capabilities we need, wherever they are across the business, and not centralize them. We want to leapfrog our legacy culture and create enterprise-wide capabilities in architecture and analytics. This can be challenging, especially when many of our acquisitions bring with them a strong successful culture.

What advice do you have on developing a target architecture?

Most organizations today need a target architecture that is adaptable and flexible, with great API management. This can be a major change for a company with a legacy of point-to-point integrations and ETL-based interfaces. The key is to leverage microservices rather than write monolithic applications. Let’s say you are building an application that will allow people in a retail store to manage tasks. How do you create an extensible solution so that, if you want to bring in data on customer loyalty or social behavior, you can feed that data into the store application?

Our approach is to simplify our applications so that we can add services and scale them. I sometimes see people rush to an MVP (minimum viable product) that isn’t scalable. If you show up with an MVP, you need to have the architectural design to grow and scale it.

In determining your cloud strategy, it is critical to understand what you’re really trying to solve. Is it the removal of latency closest to the customer? Scalability for seasonal inflections? Some CIOs want only one cloud provider and may make their choice based on the application stacks that they want to migrate. If you’re a Microsoft shop, look at Azure. If you are building something greenfield, it might make sense to leverage only Google. AWS has been in business for a long time and understands fine-tuning. But regardless of the cloud provider, you need to understand your KPIs and what defines success for each application.

How do you develop new capabilities in your team?

I like to invest in the people who invest in themselves. When I see people actively engaged in learning new skills, I bring them onto a new project, give them a stretch goal, and put them in a position where they can contribute but can fail safely and fast, while asking more senior people to mentor them.

Technology is evolving so quickly that it is time-consuming and expensive to recruit people with new skills, especially in today’s environment. My approach is to invest in the people who demonstrate interest and aptitude, while also bringing in people from the outside who can raise the level of the whole team.

How would you describe your approach to leadership?

My approach has changed in today’s remote environment, when I can’t just walk up to people and see their nonverbal communication. Today, you don’t know about issues and strategies unless you are invited to a meeting. So, I find that it is very important to talk less and listen more, since I don’t have as many opportunities to read the room. But active listening is no longer enough; we need to look hard for the subtext. In this market, IT professionals can easily pursue new employment opportunities, and since people look for leaders who will listen, support them, and be honest with them, it is even more important for CIOs to be honest and direct.