Questions with… Deb Henretta, Board Director at Corning and American Eagle Outfitters.

After overseeing multiple digitization efforts, the veteran director has insights on how boards can help their firms make smart tech decisions

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As she engineered one of the biggest turnarounds in Procter & Gamble’s history, ending a 10-year slide in sales of its high-profile baby care products, Deb Henretta was noticing that mobile phones had gone from a being a luxury item to something hundreds of millions of people had worldwide. Her bosses noticed, too, so in the early 2000s they helped place her on the board of Sprint, then one of the biggest upstarts in US cellphone service. Get valuable experience as a first-time director, her bosses encouraged her, but bring back information to help P&G incorporate this budding technology. “Cell phones were just becoming a means of digitization, the most basic kind,” Henretta says.

The importance of integrating technology into everything in business helped Henretta continue her ascent up the P&G corporate ladder, eventually becoming the company’s president for global e-business. Since she left P&G after a 30-year career in 2015, her focus on both boards and digitization have moved in tandem. She’s been a director at firms such as Corning, American Eagle Outfitters, Godiva and others as they dove into digital transformation efforts. She currently sits on the boards of multiple public and private firms.

Henretta spoke with Korn Ferry about a how digitization efforts have evolved and how directors can help their firm’s make smart tech decisions.

How does digital transformation look now versus the pre-pandemic times?

Different companies were at different levels of recognizing the need pre-COVID. For a lot of companies, it was still a visioning exercise. You had talk about how digital transformation could improve effectiveness and lower costs. But it was still a lot of talking about digital vs. walking the walk on digital. Then the pandemic comes, and it pushes everyone to accelerate on digital tools. You had no other choice.

The same could be said about Big Data. ‘We got to use Big Data. But again, lots of talking, not walking. You had lots of acquiring data, so people are now swimming in it.  Now firms want to better use the data they have acquired and, in the process, move from being data novices to data natives.  The companies that are using it best can take the data, cleanse it, sort it, move it into insights, then leverage them into action for business.

What’s next?

The next step is using the data to create algorithms that can inform, make predictions to drive your business.  It’s going from Big Data into the realm of artificial intelligence. Right now, businesses are using data to instruct and inform reasonable algorithms and decision making. It’s taking zillions of data points and organized it to get you to knowledge. But the more sophisticated use of AI will try to approach how human brain learns vs how a computer learns. For example, to get an AI to now understand cats, you put millions of photos of cats to help the computer know what a cat is. A toddler sees something once that’s small, furry, has four-legs, cute ears and meows and now knows it’s a cat. The more that you can get the data to work hard for you, the more you can cut down on the amount of data needed and while doing so lower costs.

It sounds like digitization never stops.

Digital must be in the fabric of the organization, the DNA of the company. Digital is not a one-time activity, it is an ongoing tool that you use to do whatever you do or make better, cheaper, and faster. A lot of times people think “Well it’s good for this but not that.” If you think about digital as a tool, there isn’t a function or region or category it can’t permeate.

So, what does a board director do with knowledge like this?

An effective board member leads and influences by asking the right questions versus dictating solutions. Make sure your board has capabilities in these emerging areas. The logical start was getting digital experts on boards. It wasn’t the only option but that was good to get basic level of knowledge and understanding. But that is no longer sufficient. You need to know how to translate digital experience into corporate knowhow. Understanding how the digital eco-system plays into the firm’s long-term strategy and staffing – that’s what makes a good board.

What else does the board to help with digital transformation?

You need culture to accept changes needed to make digital transformations successful. We see a lot of companies putting digital experts into that environment. That won’t work unless you have the right culture that allows the digital transformation to take hold. It’s like putting freshwater fish into the ocean. They won’t survive without the right environment. That culture piece is something too many boards, and management teams, for that matter, aren’t taking enough time to understand.

I said, changes, not change. You also need to have personalities that are agile and forward-looking. Too many people think they DO digital transformation and they’re done. It’s a forever activity and we’ll be pushing what is possible over time and keep up with that.

Knowledge. Culture. What are other areas directors should be asking about around digital?

Make sure you are funding appropriately and track vigorously. This is an odd one, because I actually believe you are better off starting slow to eventually run fast. In early days you’d see management teams make huge investments in data and then complain, ‘I don’t know what I got.’ Many bought too much too fast in a field that’s moving too fast. You’ve spent all the time learning about something that has become outdated before it gets fully utilized. Be willing to make right investments but buy only what you need. Then track the impact on the business to be sure you are getting your money’s worth

What about security?

Board also must provide oversight on digital downsides including cyberattacks, hacking of personal identification, violations of privacy, misuse of data, and fraud. Those are critical areas where management and boards have oversight responsibility. There have been enough cyberattacks that most companies are on to it. But I don’t think people have gotten around to the others.