CIO and CTO Art Hu on incubating a new business inside Lenovo

Over the past several years, IT has undergone a profound shift in which a formerly support-oriented organization has taken on a much more prominent customer-centric role. Much of this has occurred thanks to the power of data to drive decisions and digital transformation’s impact in enabling companies to create new service- and data-based offerings around their core products.    

After hearing recently that Art Hu’s CIO role at Lenovo had been significantly expanded to incorporate customer solutions, I was eager to talk to him and learn more about how he has approached this shift to a “CIO-plus,” customer-centric IT leadership position. Our conversation touched on how this new opportunity evolved, the central role that data plays for CIOs today, and how his new CTO duties differ from those of his CIO post. What follows is an edited version of our interview.

Martha Heller: In addition to Lenovo CIO, this past April you became CTO of Lenovo Solutions and Services Group. What is that new business?

Art Hu: Last year, Lenovo stood up our Solutions and Services Group (SSG) as a part of our pivot from hardware sales to solutions, including offering our products as a service. Device-as-a-service (DaaS), for example, is our fastest growing business. It allows customers to avoid making large hardware capital expenditures and move to a “consume as you go” model where we manage, configure, and deploy their devices for them. 

Think of SSG as a high-growth startup. Last year, Lenovo earned more than $70 billion in revenue, of which SSG contributed a little more than $5 billion. Our goal is to double our revenue in the next few years.

What does SSG’s rapid growth indicate about the evolving world of business and technology?

The first point is the shift from delivery to outcomes. It is no longer our goal to simply manufacture and ship a piece of hardware. Our goal is to deliver value through business outcomes. But you can only pivot to a customer-outcomes mindset if you have customer intimacy and understand the context in which your technology is being used.

One example is Lenovo’s AIOps service, where we analyze a customer’s data about hybrid cloud service and make recommendations to optimize it for stability and performance. The rapid growth of SSG points to the fact that today, you need more than the right technology: The technology needs to make your data visible, accessible, and actionable.

What lessons learned can you offer CIOs on generating actionable data?

The first lesson is to create clear data standards. We learned that some data needs to be common (the definition of a ‘shipment,’ for example), but we also learned that we cannot standardize everything. We need to allow for some variation in how people operate, even within a global model.

The second is to start building guardrails around the data. When we told our business partners what they could and could not do with the data, they just went off on their own and did it anyway. We realized that we needed to strike the right balance between standards, guardrails, and flexibility. It took us a couple of iterations to get it right.

The third lesson is all about education. You cannot assume that your business partners know what to do with the data. Early adopters will know exactly what they want, but others may not. As an example, we had significantly upgraded our ability to gather feedback on social media, and we started to send customer comments from Twitter and LinkedIn back to our product development teams. We assumed those teams would love all that data, but we were wrong. Someone actually said, “Please stop sending me all of this data. I don’t know what to do with it.” We learned that delivering data is not enough. We need to help our business partners understand it and then use it, to take advantage of these marketplace insights.

What does the SGG CTO role entail?

The first part of my job is to choose the technology investments that will enhance our customer offerings. Where can RPA (robotic process automation) complement our solutions portfolio? How will AR and VR extend our capabilities? The second is to expand the solutions portfolio to bring more choices to our customers. And the third is to leverage SSG as a platform for innovation that drives the future of our solutions and services strategy.

How is that job different from your CIO role?

In both roles, I am continuously scanning the technology landscape to identify opportunities and building a strong engineering team and culture to deliver. But there are differences as well.

For example, my level of external engagement. A CIO’s stakeholders are typically the business users within the company. As Lenovo’s CIO, I build our core business applications, social media and e-commerce sites, and spend time thinking about business scenarios, deployment, and ways to capture value. As CTO, I spend more time in the market, understanding emerging trends and the competitive landscape. Those give me a strong perspective of customer insights, which are then sharpened in discussions with our business leaders and the sales teams. The result is a better-informed offering development process.

My perspective on budgets and investments is also different. As CIO, you typically have a budget against which you prioritize investments and initiatives. But as the CTO in a new P&L, if I cannot articulate a clear value proposition for my technology investment roadmap, my development budget is zero. The conversation shifts from “your budget needs to decrease by 10%, so you can do some but not all of your priorities” to “your budget is zero because we don’t believe your technology strategy will grow our P&L.” (That hasn’t happened yet, fortunately.)

Finally, there is the difference of working in a startup versus working at global scale. As CIO of Lenovo, I manage the teams that support a multibillion-dollar business. The SSG CTO role, on the other hand, has required me to get into the nitty-gritty of incubating a business. Being a leader in a $70 billion business is very different than supporting a new line of business in the “from-zero-to-one” stage of maturity. 

How did you wind up in the role?  

I was asked to take on both roles for several reasons. The first is that for years, industry trends have indicated that the future would be increasingly software-defined, so we have been building up our software capability within IT for quite a while. 

At the same time, SSG’s approach to developing our offerings has been to tap into the best of Lenovo’s assets from across the enterprise and integrate them into a single offering, with software being part of the “glue” that ties it together. The requirements to execute this type of exercise were a natural fit with IT’s software capabilities, especially the engineering methodologies, processes, and platforms that were needed to build SSG’s R&D platform.

Second is our “Lenovo powers Lenovo” concept. Over the years, our customers have wanted to know how we, at Lenovo, run our business: Supply chain planning, warehouse operations, and globalization are good examples. They also wanted to know more about the hybrid cloud solution we built in-house. They said, ‘Can’t we just buy what you’re doing?’ So, we took some of the solutions we had developed internally to run Lenovo, productized them, and began offering those to our customers. Although I didn’t know it then, I was incubating a small business within IT, and that was one of the seeds that ultimately led to my taking on the CTO role.

What advice do you have for CIOs who would like to take on a CTO position?

Don’t wait. If you are developing software solutions internally that could be valuable to your customers, start thinking about those solutions as the beginning of a business. As CIO, you are perfectly positioned to do this, since so many ingredients of a software-enabled solutions business are already sitting within your purview. My advice to CIOs who are looking to do more would be to look at the assets they already have.