Flex CEO Mike McNamara delivered the Innovation Keynote at Workday Rising, discussing how the world has moved from the information age to the “age of intelligence,” where turning data into business insights and having a culture of agility have become imperatives.
With $25 billion in revenue, including 12 industries with greater than $1 billion scale, Flex has unparalleled visibility into global business and where it’s heading. As an early Workday customer, Flex made a strategic bet on digitization and real-time access to data. We had an opportunity to sit down with McNamara after his keynote and ask him about change, culture, and his counterintuitive take on risk.
It’s an old chestnut that companies need to embrace change. Flex seems to have truly done so—how have you accomplished that?
I like to say Flex was born in change. We’ve grown a tremendous amount, from 2,000 employees to 200,000 over a 20-year period. We also sell into a broad range of industries, and we don’t always have visibility into our customers’ marketing plans or pipeline. They call us up and say, “We need to move that factory to Brazil next quarter.” And if we can’t change quickly or execute, we’re losing money.
“If you can’t embrace change and pivot your business model as the world pivots around you, you won’t succeed.”
People don’t typically embrace the unknown. The science of change management has been around for years, and companies have been working on change management for a long time, but maybe haven’t always taken it quite as seriously as they should.
What’s new is that the slope and rate of change of disruption is so much greater now. There are real, aggressive competitors out there, making innovative products and services. If you can’t embrace change and pivot your business model as the world pivots around you, you won’t succeed.
Flex has invested heavily in using data to guide decisions. What advice would you give to companies who want to move in that direction?
We have built a management systems layer that we use to make decisions. It takes real-time data from all kinds of systems, including HR, finance, and supply chain, and makes it usable. Data by itself isn’t very interesting, but when you can turn it into actionable insights, it’s really interesting.
First, you have to digitize so you can get to the data. The second step is deploying a system to organize the data, and this is where platforms matter. The system needs to make it easy to get to information and must have the flexibility to be continuously improved. Finally, you move into creating actionable insights from the data. It’s a journey, and it takes time. But if you don’t start, that’s a problem.
That’s how we started with Workday—it was the first system we used to get us to real-time data. As a management team, we decided that we needed to digitize and have a single source of truth. We needed an architecture to get at the data. Workday has served as an example for the rest of our company when we moved our health system and supply chain to digital.
“If a company doesn’t have a culture that can enable the kind of change required to thrive, it won’t be successful.”
You shared in your presentation that “culture is the only sustainable advantage.” Where does culture fit into this?
Culture is huge. If a company doesn’t have a culture that can enable the kind of change required to thrive, it won’t be successful. I was at a CEO roundtable recently, where each of us talked about different issues and regions that were critical to our businesses. I said, “The most important thing for every company to work on is a culture of agility.”
Without a culture of agility, you can’t execute. Culture bridges strategy and execution, and allows us to turn good ideas into real results. Without culture, you can’t take advantage of those real-time systems to make adjustments and embrace change. When the CEO wants to turn left, and the business is stuck in their old ways, then they’ll fail.
Many companies see replacing core systems like HR and finance as a risk. You see it somewhat differently.
When we were evaluating Workday, I said to the management team, “I can guarantee we’ll be mediocre if we pick the same solution as everyone else,” and suggested we could go in a different direction. In my view, the bigger risk was to invest Flex’s money in a mediocre solution. We don’t want to be average—we want to lead.
Risk has to be borne by the leadership—if the CEO and executives don’t embrace risk, then they can’t expect people elsewhere in the organization to do so. We also think about how to execute to mitigate risk. With our Workday deployment, both Flex and Workday went all in. It created commitment, camaraderie, teamwork, and a focus on a common objective. And that led to a successful deployment. Ten years later, it’s become what we’d hoped.