As part of my series about the “How Businesses Pivot and Stay Relevant In The Face of Disruptive Technologies,” I had the pleasure of interviewing Chris Sowa, Global Vice President, Schneider Electric.
Chris Sowa has over 20 years of experience in driving innovation, strategy execution, and new ventures leveraging disruptive technologies. He has a global track record of success in Europe, Asia, Australia, and the United States. As a Global Vice President, Energy Management Software at Schneider Electric, Chris is developing a new billion-dollar cloud-based software business through strategic partnerships and acquisitions.
Chris also has experience with disruptive technology and startups from his work as the founder of his own startup, which leveraged AI and cloud technology, and work as a member of MIT Enterprise Forum’s Innovation Committee.
Thank you so much for joining us in this interview series. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I got started working with disruptive technology during the “.com boom” in Silicon Valley as a Managing Consultant at IBM working with C-Level executives to help them re-invent their businesses using digital. During that time, many CEOs were running scared because of the emergence of online powerhouses like Amazon rapidly taking market share. They were also afraid for their jobs because the internet startup AOL had just purchased the media giant Time Warner, proving that even large companies were vulnerable to displacement in the digital age.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
Early in my career, I was working with a group of executives at a large Japanese company in Tokyo on how to leverage a new digital technology using a facilitation approach I had used successfully with C-Level executives in the Unites States many times. During this first day in the client workshop, I called directly on the most senior executive in the room and asked him a question to which he did not know the answer. This caused him to feel as if he had “lost face,” something I did not intend and is extremely negative in Japan. I learned my error that night from one of the Japanese executive’s subordinates over sake. After a couple rounds of sake, his frustration with me turned to laughter, as I continued to apologize profusely. The next day, I made sure that as a young consultant, I only addressed my questions to the executive’s subordinates and showed extra deference to him. This change led to a very successful engagement, and I believe created some of the best deliverables I ever produced in collaboration with a customer anywhere in the world. This lesson taught me that while working with disruptive technologies can be complex at times, the technology is often much simpler than teaching digital disruption across companies and across cultures. I also learned the joy of learning about different cultures and the powerful impact of leveraging their diversity.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
I have had many great mentors, so it is difficult to choose just one. I make a special effort to learn at least one thing from every successful executive I work with, including my most successful subordinates. For example, I learned the importance of presentation design / orchestration from one executive who was especially skilled in this area. From another, I learned how to measure a large team for success. Also, one of the people I have mentored for years introduced me to a company that was looking for a leader (a role I ultimately accepted), so the benefits of mentorship accrue to mentors, as well as to mentees.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?
When Schneider Electric first started, its purpose was to provide safe, reliable, and high availability electrical solutions. This purpose has evolved over time to now be “to empower all to make the most of our energy and resources, bridging progress and sustainability for all.” We also have a belief that “access to energy and digital is a basic human right.”
Thank you for all that. Let’s now turn to the main focus of our discussion. Can you tell our readers a bit about what your business does? How do you help people?
I am a leader in a new part of Schneider Electric in which we are building an Energy Management software business that digitizes the entire construction lifecycle. We are helping our customers design, build, and operate the next generation of smart, energy efficient, and sustainable buildings. We believe that due to our scale, and in conjunction with our customers and partners, we can make a large potential impact on climate change.
Which technological innovation has encroached or disrupted your industry? Can you explain why this has been disruptive?
The construction industry is one of the last industries to digitize its work processes. A combination of increased compute power for rendering buildings / advanced simulations, the advent of 5G for connectivity enabling a connected work site, and SaaS-based BIM5D solutions like Rib Software’s MTWO that digitize the whole construction process are game changers.
What did you do to pivot as a result of this disruption?
At Schneider Electric, we are investing in our EcoStruxure platform, partnering with key industry software players, and investing in leading construction software companies. This includes our partnership with Autodesk to develop the next generation electrical design solution, the acquisition of Rib Software to digitally enable the build process, and our investment in Planon software to help our customers enable smart building operations.
Was there a specific “Aha moment” that gave you the idea to start this new path? If yes, we’d love to hear the story.
At Schneider, we see digitization as a key enabler of smarter and more sustainable building design, building construction, and efficient sustainable building operations. Noticing how millennials use their personal digital devices on the job, and long time construction experts retiring en masse, it was clear a move toward digitization is inevitable.
So, how are things going with this new direction?
Our customers and partners are very excited by the investments we are making in this area to enable their businesses; our cloud software revenue is growing exponentially.
Can you share the most interesting story that happened to you since you started this pivot?
When we first started acquiring software companies in the design space like IGE XAO and Alpi, some customers and even some employees were a bit confused why a market-leading electrical and automation product company was getting into software. Now that we have partnered with Autodesk, acquired Rib Software and invested in Planon Software, we have customers and partners calling and wanting to talk to us, since they now see how we have built the foundation for the complete digitization of buildings across all aspect of the building process (design, build, and operate).
What would you say is the most critical role of a leader during a disruptive period?
Constantly communicating the vision and engaging with customers to put these solutions to work for them in the most productive way, regardless of obstacles.
When the future seems so uncertain, what is the best way to boost morale? What can a leader do to inspire, motivate and engage their team?
It is important to highlight important contributions and recognize great teams as they overcome adversity. Even incremental success that meets customer needs and executive objectives should be shared, so people can see their efforts are appreciated and that they are making a difference.
Is there a “number one principle” that can help guide a company through the ups and downs of turbulent times?
You need to be consistent with prioritizing customer needs in your strategic direction rather than prioritizing short term gains. During COVID, it would have been easy for us to stop focusing on optimizing and digitizing construction for our customers. Instead, we increased our level of investment in this area. We developed new ways of working digitally that will continue to benefit our company long after COVID risks are mitigated.
Can you share 3 or 4 of the most common mistakes you have seen other businesses make when faced with a disruptive technology? What should one keep in mind to avoid that?
1) I have seen businesses that keep disruptive technology in a “sand box” only for R&D teams to play with rather than taking these ideas to iterate with customers. This makes for interesting R&D, but has little market impact.
2) Another mistake businesses make with disruptive technology is not focusing on business. I was once working with a client that was investing over a million dollars in an artificial intelligence initiative that would eliminate 3 head count for a total savings of $180 thousand. Projects like these may pad executives resumes, but they do a disservice to shareholders.
3) One common mistake I see at large companies is that often, no business executive has accountability to scale the disruptive technology to impact their P&L. If no one is accountable for real business results from the disruptive technology, they never materialize.
Ok. Thank you. Here is the primary question of our discussion. Based on your experience and success, what are the five most important things a business leader should do to pivot and stay relevant in the face of disruptive technologies? Please share a story or an example for each.
In my experience in my role at Schneider Electric as a Global Vice President helping our customers to digitize their construction businesses and based on my experience in over 20 years of leveraging disruptive technologies for business impact, the five most important things business leaders should do to pivot and stay relevant in the face of disruptive technologies are:
1) Pack a powerful first punch: Some innovators misinterpret acting iteratively to mean picking “safe” projects with little risk. These types of projects often position disruptive technology within the company as “nice to have” rather than a truly disruptive. You need to start embracing disruptive technology in an area likely to show a major impact on your business. For example, if you are a design firm looking to capitalize on shifts to sustainability and renovations, leveraging disruptive technology to create a new revenue stream in existing buildings from AI that monitors buildings and identifies renovation opportunities is likely to have a material impact on your business. Leveraging disruptive technology in this way is the way will allow your company to increase revenue in this initiative and encourage its use elsewhere.
2) Ensure the giants are standing behind, you instead of in front of you. You would be surprised how many disruptive technology projects are not tied to an executive’s objectives, often dooming them to irrelevance before they even start. This is why, before implementing Rib Software, sales team insists on having a lab to review how the software can be best leveraged to achieve senior management’s business imperatives. One customer we worked with had promised shareholders double digit growth. For this reason, we targeted leveraging the software for pre-construction estimates. By focusing the solution in this area, the customer was able to increase their win rate by 20% and implement the larger transformation. Again, aligning disruptive technology to your executive’s goals is a game changer.
3) Use a dedicated agile team to enable disruptive technology. Some companies believe by adding more KPIs (I have seen employees with as many as 20 KPIs), they achieve more results. Not only is this not true, it is also especially dangerous with disruptive technologies, which require more attention due to the curve and the way they transform the business. Dedicated transformation teams are needed to shepherd these disruptive technologies into use. At one company I worked with, the management had the foresight to take a group of employees exploring using natural language processing (NLP) after normal business hours on their own initiative, and dedicate them full time in charge of a project to use smart chatbots for customer service. This company is now achieving hundreds of millions of dollars in benefits due to impacts from this technology on customer service, sales, and collections, thanks to this focused team.
4) Bring at least one leading customer on your disruption journey. When we explore new disruptive technologies, we always seek to co-innovate with our customers to ensure relevance to their business. We are currently partnering with a customer on using disruptive design software that can help optimize renewables and building materials for energy efficiency buildings, while optimizing costs. We need to be sure that the new software solution can have a massive impact on the customer’s carbon zero goals and allow the customer to do this in a cost-effective way.
5) Plan to scale like a rocket ship. If you don’t have a plan to scale your disruptive technology, it is unlikely you will ever scale. In our recently announced partnership with Autodesk, our Schneider Electric team will be developing the next generation electrical design solution. As a key part of this process, we immediately began planning the customer segments we intended to serve and created a plan to make this new solution happen for our customers across the 110 countries in which Schneider Electric operates.
Video of Chris Sowa’s Five Things: https://youtu.be/bnBthscLYhs
Can you please give us your favorite “Life Lesson Quote?” Can you share how that was relevant to you in your life?
The quote I wrote for my high school yearbook was “If you don’t learn to laugh at life, you make yourself the biggest joke.” Even now many years later, I still believe this to be true. If you are someone that works with disruptive technology, you will be surprised occasionally in positive and negative ways, and it is important keep our sense of humor and humility.
How can our readers further follow your work?
I am active on LinkedIn (https://www.linkedin.com/in/chrissowa/), so that is a good place to follow me.