The open path to digital transformation

Success in the digital age requires open culture, processes and technology. Experts at a virtual roundtable discuss how these interact to accelerate change.

In this roundtable, which you can watch in full online here, Ashish Surti (AS), EVP of technology and security at Colt, Three UK CIO Belinda Finch (BF), TalanxAG/HDI CIO Dr Christopher Lohmann (CL), Major General Tom Copinger-Symes (TC-S), who is director of strategy and military digitisation at UK Strategic Command, Siemens CIO Hanna Hennig (HH), and Werner Knoblich (WK), SVP and general manager EMEA at Red Hat, discuss digital transformation.

For organisations undergoing transformation, what does an open culture really mean?

BF For me, an open culture is all about authenticity and being able to bring your true self to work. It is also very important to have authentic leaders who let people be accountable. You need a high degree of trust and to embrace failure as part of the learning and development process.

HH I’d add that it’s predominantly about building on each other’s ideas, ensuring people are willing to share in building a really great product. You need joint purpose, values and priorities that can guide people to really collaborate.

CL Building on that, we encourage people not only to develop code, but also to publish it, going out to the community with something of value, sharing what they have. Yes, it is about getting something, but it is also about giving, and both are important.

AS At Colt we do a lot of work building trust around communities of interest and people within structures. But I agree inclusion and diversity are important as well; they make sure everyone has the time and purpose to contribute their ideas and participate.

TC-S There’s something counterintuitive here. Sometimes the best way to have everybody bringing their best self to work is to have an organisation with a really strong overarching identity. Provided you have that overarching theme in place, it allows everyone to be themselves within that wider purpose.

Have the changes to working practices over the last year made it harder to create an open culture?

BF I think it’s easier because everyone’s more authentic: they’re at home, you see the backgrounds, kids flying in, cats on keyboards. And it breaks down barriers; we’re all in the same boat and it puts you at ease, even if you’re talking to the CEO. You feel you can challenge more than when you were in an office and had to knock on the big office door.

TC-S There’s something interesting in there about vulnerability. When I was a kid, leaders had to be perfect, to know all the answers. Now I think leadership is more about asking questions and getting good answers from people much more junior to yourself. I think this is something we’re just starting to lift the lid on.

What is the culture of winners in the digital space? And what is the culture of those who are losing?

WK The key thing is every culture has its reason; they are optimised for certain things. A top-down structure is optimised for efficiency, but not optimised for dealing with an uncertain kind of future. An open organisation is much more kind of optimised for this and for speed. Also there is the principle of meritocracy of ideas where the best idea wins. It’s a principle that grew up in the open source community and one we apply to our entire organisational model.

Which is more important, culture, process or technology?

HH Culture, absolutely. [Management writer] Peter Drucker said culture eats strategy for breakfast; this means you won’t succeed unless you get culture right, regardless of how good you make your strategy and tools.

CL I agree, but also from a management point of view, it’s hardest to change. We are in the insurance industry, which is becoming more digital and building a meritocracy culture. Where competence matters and not hierarchy is a key challenge.

AS But you can never have a single culture, especially in a global organisation. You have different offices, perhaps a different culture in headquarters versus business units, and various lines of business. We can align values and behaviours, and I think that then drives a set of cultural principles, which gives direction. But you have also to accept there will be different cultures within the business and then you have to play to the strengths of that as well.

WK I think the key thing is you have core values, a wide statement about what you are as a company. Obviously, this would get interpreted a little bit differently in Sweden or Russia or France; you still have a role for local cultures, different interpretations. But I think it’s important to have certain clear values and a purpose everybody can get behind.

HH You have to be careful about imposing culture to a certain degree. For example, if you’re acquiring a startup, you need to be careful not to absorb or overwhelm them with a large-company culture. Also you have to look at the project: is it a major infrastructure programme where the priority is safety and security? Or a digital transformation that needs speed? We have to allow for different cultures within a joint purpose.

Does dealing with multiple cultures create a management challenge?

AS At Colt we operate from 21 different countries, but I think you have to think not at the team level but know people as individuals, what motivates them, and understand the kind of values and behaviours that are dear to them. You can’t have a cookie-cutter process saying this is your culture and this is the box you fit in.

TC-S It’s also about resilience. If you have a monolithic culture, you probably appear quite strong, but you won’t be very resilient. Ashish was talking earlier about multiple cultures within an overarching set of values and I think that breeds resilience, especially in times of crisis. That’s something we get out of open culture as well.

Let’s talk about open processes. Have we reached the perfect model with agile/DevOps/DevSecOps or is this a simplification?

AS From my perspective, we are still on a journey. We have half the organisation using the waterfall model [traditional linear software development], because we run a very physical business, and the other half in transition. I think there’s still innovation to be done in terms of consolidation of tooling languages, how we use data, how we use artificial intelligence and machine learning to help us in these agile methodologies as well.

TC-S We absolutely need to move to agile, but I don’t think waterfall is going out of business any time soon, especially for those who build big platforms – for us that is really big ships, fast planes and some big armoured vehicles – as well as the software to go with them. You need both, but when you are using edgy, startup type processes, there is a challenge in scaling them up.

IT in the future is not behind walls or a black box, but very open, providing inte­gration at the back end

WK It’s also important that in your first agile incubation teams, you have volunteers who are wanting to do something different and are motivated. It leads to higher success rates.

What’s the best way to connect open processes to the rest of the business?

BF We are trying to set up teams led by “product owners”, multi-skilled individuals who naturally know agile methodology and run multidisciplinary teams. They understand the business but also deeply understand technology, bridging the gap. One way of finding these people is our new graduate scheme that brings people into technology and trains them up in the commercial side of the business, so they can grow up in the organisation and fully understand both sides.

CL In insurance, traditionally, we were organised with the business developing new products, processes, whatever and then throwing them over to the other silo that was a separate IT company. But when I joined Talanx eight months ago, I found something very interesting, the management board in charge of IT was at the same time in charge of the business and the same was true for their direct reports all the way down to the team level. When I did some meet and greets with the agile delivery units, I couldn’t tell who was business and who was IT. And in the end, it didn’t matter because they were fighting for a common cause.

HH It’s also about providing the right tools to the people in the business so they can do it themselves, things like low code or no code. It’s a democratisation. To me, IT in the future is not behind walls or a black box, but very open, providing integration at the back end.

Moving onto open technology, what is the connection between open culture and open processes?

HH For me, open culture, open source and open technology go hand in hand. And in the future, I believe all companies will decide to go this way because if you don’t embrace this technology, you’re limiting yourself from setting up a true platform business, where everyone builds on each other’s ideas and enjoys network effects.

CL Whenever we buy software, we challenge a proprietary solution against open source solutions. We need to assess risks and costs, all that we have already discussed, including the cultural aspects and the impact on attracting talent. It ends in a case-by-case decision.

Open source not only motivates staff; it also helps drive technology for­ward in a way you can later consume

TC-S We’re moving from a need-to-know to a need-to-share mentality; open standards are the key. We have just launched our first “bug bounty”, paying ethical hackers to find vulnerabilities in our systems so we can fix them.

HH This is a marathon and not a sprint, and again it depends on the industry. If your competitive advantage in the past was your intellectual property, patents and so on, you will not be prepared to give that all away immediately by fully opening up.

CL It’s difficult to imagine moving into open technology without an open culture. But there’s another direct link between culture and open technology, and that is talent. Yes, open technology lowers costs and brings speed to market. But it also attracts the people we want to work with.

WK Developers build their CV on GitHub [an open source software repository] now. Open source not only motivates staff, though; it also helps drive technology forward in a way you can later consume. Plus, what you need to understand is open source is now the real technology innovation engine. When you think about cloud, containers, machine learning… it is all coming out of open source communities, partly because the big web 2.0 companies like Google and Facebook are all contributing to open source communities.

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