Innovation In Action: My Interview With EY’s Global Chief Innovation Officer Jeff Wong24 August, 2017 / Articles
Bruce Rogers: Tell me about the role of the Global Chief Innovation Officer at EY? How did you find yourself in that role?
Jeff Wong: I grew up just outside of Silicon Valley in the East Bay. I went to Stanford. I spent some time in venture capital and then I spent almost ten years at eBay. And the last five years that I spent there, I built and ran something called the Business Incubation Group. And the job there was to build new businesses for eBay. There was a nice, natural fit from what I was doing at eBay to what I do today at EY. The way I look at my team’s job and my job specifically is that I’m here to create “new.” And I put quotes around create new, because that means everything from creating new services to creating new ways we should deliver those services, to looking at the way we do our old service in new ways, to thinking about how people and processes and business models need to change within the context of the environment.
Rogers: Why is innovation so important today?
Wong: Now, that’s a good question. People often ask, “why should we have a Global Chief Innovation Officer today?” And the fact is this firm has been around for over a hundred years. We employ 250,000 people. We are very successful at what we do. But what I think we recognize is that the pace of change has accelerated, and in fact continues to accelerate. And I think this is a fundamental challenge, not just for EY but for all businesses. That isn’t a particularly new insight, but I think what we saw is that because that pace of change has accelerated, it’s hit a tempo where the processes and the people and the decision making, and how we approached things for the past ten years, which actually made us incredibly successful in what we’re doing, probably aren’t going to work for the next five; and that we need the ability to think through how we approached not just technology-enabling our business, but really thinking about how our business needs to act and operate differently over the next five years in order to be able to match the speed of the world around us. And that’s the same message we’re seeing from all the industries we serve. All the CEOs that I talk to are seeing and feeling the same thing. So that’s why innovation is important to us today.
Rogers: Are we talking about both the consulting and the audit side of the house for EY?
Wong: It’s everything. We’re looking at everything from assurance, tax, advisory and transaction advisory. We’re looking at all of our businesses that way.
Rogers: Is the auditing process about to undergo dramatic innovations?
Wong: We get asked that question a lot. If you look at any top ten list of industry roles that are going to be disrupted over the next five, ten years, tax and audit are always in the top five. The way we look at it is that we want to be the ones driving that evolution. We want to be the ones helping define how our industries evolve. We’re thinking about it holistically, and we look forward to the evolution because we expect to, and we are certainly planning on, driving a lot of that evolution in our industry.
Rogers: Can innovation be about process as well as new technology?
Wong: Yes. When we talk to CEOs, most try to equate innovation with technology. And certainly, technology is driving a lot of that change. We invest a lot in technology, too. But when you think about it, when we do something new, you can’t just bring in the new machine, plug it into the wall, and walk away. That rarely works in driving true and fundamental change. What innovation is really about is helping us match this pace of the world around us and helping us evolve ourselves and our industry in a way that’s interesting. And that’s where people, processes, business models, how we train people, how we hire people, who we hire – all of those questions are an important part of us evolving our whole business. And that’s really the impact I’m trying to drive at EY.
Rogers: Do you see it as an extension of, a complement to, or just another word for digital transformation?
Wong: Digital transformation is an incredibly important motivator to change and evolve today. A few years ago, big data was the mantra. Today, automation up through artificial intelligence is having its heyday. Last year, blockchain was there. Digital transformation is an important part of innovation. It’s an important part of what a lot of companies go through today. But really, the way they need to think about it isn’t “I did digital transformation and now I’m done. Great, that’s it. I don’t have to change anymore.” They have to think about how they change their firm so they can continuously evolve, because that’s really what we’re seeing. When we say the pace of change is accelerating, it’s not one thing driving the change, it’s the fact that it’s continuously evolving. For us, digital transformation is important for the next hundred years.
Rogers: That’s an interesting, long-term perspective. Are you also helping companies in their innovation journey, in addition to helping EY be innovative?
Wong: The majority of my time is focused on helping EY think about itself differently, but certainly as a natural course of that I talk to a number of clients around the world very regularly. So I do have conversations with boards and CEOs and CFOs, because everything we’re doing in the end impacts our customers. We’re happy to share with our clients our own innovation journey and what technologies we think are interesting.
Rogers: Tell me about the EY Innovation Centers?
Wong: We have a number of what we call Wavespace centers around the world. When you walk into a Wavespace center, the first thing you notice is that it’s a very different environment than what people think for a gigantic professional services firm, particularly one that’s steeped in audit and tax. It’s much more open, much more dynamic, much more energy–it looks much more like what you would imagine a start-up or new internet company to look like. We thought that physical environment’s important, because we wanted a place where we could have our people working, but also we could bring clients in to where they would just feel that this was a space that was safe to think and act in a different way, to think more openly about the change that’s happening in the world. And then the second thing you’ll notice is that we have a lot of very interesting technology investments that allow for a dynamic conversation. Everything is touch screen to the integration of iPads to be able to scan documents to create 3-D imagery out of flat architectural documents for example. We’re also able to attract and hire different types of talent that are attracted to that type of physical environment, so it’s helping us in our evolution in many different ways.
Rogers: What about the classic innovator’s dilemma? Everybody wants to innovate, but they’re busy doing the things that make them successful that prevent them from being innovative. Failure is part of innovation. You have to experiment to be innovative. How do you help companies think through these challenges?
Wong: It’s a great insight. The fact is, things don’t always work out exactly as you planned. And I think that you hit on this very useful insight that is more powerful today. Companies used to be able to sit back, see how the industry was evolving, take in all the data, then decide what action to take. The world is moving so quickly now that you often have to start down the pathway and process before you have a lot of the data, before you have a lot of the information.
Here is how we approach it. One, we have a portfolio of internally-funded start-ups. They act and operate much like startups that you see outside, except that we, of course, own them and it’s an investment, owned by the firm but through me. They start at five to seven person teams. There are two or three people that tend to come in from the practice, the tax practice, the audit practice, some other practice. We then hire three or four people from the outside – “Silicon Valley” types. We call this the “suits and jeans” approach.
On the one hand we have the hundred years of expertise on connectivity with C-suites around the world, the depth of experience we have – the suits. On the other hand we have the jeans, the people who come in from the internet, technology companies, AI companies, who come in and have just a different frame of reference. And we mix them together in these five to seven person teams. And the question we ask them is what do you think the business ought to look like in five years. Take tax – what do you think the tax business ought to look like in five years? And then we tell that team, “Go build that.” And then we give it the series A funding, and then when they hit their milestones, then they get the series B, and so on. It acts and operates a lot like a start-up. I just call it internally-funded start-ups. We have a portfolio of those companies. And that’s one way we’re bringing the iterative concept, the fact that we don’t know how things are going to end up, but we’re going to start down this pathway in a very start-up-like manner, into the company.
Two, we’re doing it through our global labs around different technologies. For example artificial intelligence, blockchain – I am responsible for the Data analytics Center of Excellence and the Software Robot Center. We have a portfolio of artificial intelligence efforts in each of our business units. We just hired the former CTO of Sentient Technologies, Nigel Duffy. Sentient is the most well-funded AI start-up ever and we brought him in to be the global leader for artificial intelligence. We’re bringing in external talent, external thinking, a context that’s different from the firm; but then attaching them to these amazing opportunities that we have internally. Now we have hopes, but we don’t know how they’ll turn out. And so that’s where we’re also bring in the sense of experimentation.
Rogers: What would your counsel be for organizations that are trying to inculcate innovation within their organizations? Should they have a person like yourself? Should there be someone who is defined and assigned building innovation or should it just be ingrained in the culture of the organization?
Wong: I think everything starts with the CEO who must believe very philosophically, very soulfully, that this is an important part of his or her company, employee base, industry, and future. We have the great fortune here at EY where the entire leadership, up through the CEO and chairman believe that this is an important part of our future. I think in most circumstances, it is much easier to have somebody like me, a global chief innovation officer, a head of new product, a head of new things, a “chief troublemaker” some people call it, getting up every morning, thinking about how we do things differently, and how to define the evolution of our industry.