Fashion Starts with Digital Transformation: Being a Change Agent with Nordstrom CTO
Edmond Mesrobian, CTO of Nordstrom, tells us the majority of computer science has been solved, the problem has just been regurgitated and reformulated. Learn about the challenges of being a change agent, and how to get embedded in the culture before embarking on the change.
CTO at Nordstrom
Narrator: Inspired Execution is a podcast where tech leaders from global enterprises discuss their journey to scaling billion-dollar businesses. Chet Kapoor is Chairman and CEO of DataStax with more than 20 years of experience working with global enterprises. Join us to hear about the experiences and mentors that played a role in their growth.
Narrator: As CTO of Nordstrom, Edmond Mesrobian leads digital strategy and customer engagement efforts, which means that he's at the forefront of delivering outstanding customer experiences to millions of visitors each and every day. In this episode, Edmond talks about being relevant in the moment, enabling rich and diverse experiences and how to become embedded in a culture. What does it mean to be a change agent? Learn about the customer's journey that Edmond is bringing into Nordstrom, such as customer fulfillment and contactless technologies, which are now critical during the pandemic.
Chet Kapoor: Hey, Edmond. Thank you very much for joining us. Really appreciate you making the time.
Edmond Mesrobian: Oh, thank you, Chet. Great to be here and always fun chatting with you.
Chet Kapoor: We've known each other for a long time, working together at Expedia, at Apigee, as well as your tenure at Tesco. And now at Nordstrom's, you're the CTO and you're taking Nordstrom's digital strategy and implementation to its next level. As you think about your journey, even predating Expedia and all the different things that you've done, in your career, what has come easy to you?
Edmond Mesrobian: What's come easy? That's a great question. I think what's come easy is being a teacher. I mean, I came from academia. The idea of teaching and helping a team is what it's all about. At the end of the day in these kinds of roles, to be a supportive agent, to be a teacher and a mentor. And that's just natural. And the inquisitive part of an academic kind of background is that you're always trying to learn, you're always trying to figure out how to help, what the problem is, try to make sure and be challenging about the problem. So those kinds of dimensions are easy and just natural and second nature.
Chet Kapoor: As I think about my interactions, I think about the frame of teacher / mentor and it fits perfectly. What has been hard?
Edmond Mesrobian: What's hard is that in most companies and most of the journeys I've been on, there's an element of change. You act like a change agent. You come and you enter a conversation. And at Expedia, it was about the transformation from a certain kind of travel company, with a certain kind of agile development methodology that needed to evolve from a package software to an agile website, and then trying to bring it together across its branded properties. There was a lot of change there to think about becoming a platform company.
Edmond Mesrobian: At Tesco, the change was about trying to go and reimagine what digital can be to the company as it started to try to get more serious about its digital journey. But then you're bringing a whole new set of almost Western culture, digital, agile development methodologies and technologies. And that that introduces change.
Edmond Mesrobian: And at Nordstrom, it's similar in some respects. You come in and while they appreciate the digital journey they're on and very much engaged with it, understanding what it really would take and the kind of change it required to unify the company. So I would say the common thing that is hard is that when you come as a change agent, every ounce of you has to be motivating and always in the moment, trying to go in and champion why this change is needed and why there's value creation on the other end of it.
Chet Kapoor: And any specific tips and tricks for those of us or younger versions of ourselves who are getting into positions where they are change agents that you would suggest or recommend.
Edmond Mesrobian: One of these I have to remind myself and I keep on getting reminded is don't think you know the problem. Every situation has a dimension of uniqueness. And one of the Nordstrom cultural values is listen, understand the problem, understand the people, get embedded in the culture and then embark on the change with partners.
Chet Kapoor: Having done this at Expedia, at Tesco, and now at Nordstrom's, you've done it twice, you're doing the second time in retail, but it is digital transformations... Are there similarities independent of industries or geographies between the digital transformation journeys?
Edmond Mesrobian: As a dear friend, Alan Kay, would say the majority of computer science has been solved and the problems just get regurgitated and reformulated. There's very little new. What's new is the context and the journey that it takes to get to the other end. And so the problems are very similar. I mean, most people think that there's so much uniqueness, but at its core in retail, it's about supply and demand, it's about trying to figure out how to bring the most relevant product to your customers in a meaningful way to enable rich discovery experiences. That's all similar. I can't imagine a retailer who isn't on the journey to provide personalized, rich experiences to delight customers and to do so in an engaging way. And so to me, most of the transformations have that in common. How you go about it, what are the different unique perspectives that you might have, grocery versus apparel, there's differences of that sort. But I would say it's 80% the same and 20% different.
Chet Kapoor: And how about the geographies? Do you think that, and obviously we're talking about two separate things, groceries versus apparel, like you said, do buying habits also affect how you do your transformation?
Edmond Mesrobian: Yeah. Look, I would say it's interesting. I think the thing that was unique about the Tesco experience, at least for an American coming to work in London and living in London, and that is that in some ways, London the great city it is, it actually had a lot of what we call today unique value propositions that everyone seems to be racing to, curbside pickup, home delivery. Those have been done in the UK at Tesco for decades. It's not new. Click and collect, shopping, scan as you shop, whether you use a mobile app or a specialized device, it's almost like they were farther ahead than the US.
Edmond Mesrobian: If you think about COVID, COVID has essentially accelerated the US's journey to home delivery of grocery by half a decade. I think COVID just took the proposition from its nascency still to now where there's no turning back. So in some ways, the UK and Tesco and others have solved a lot of those problems about store fulfillment. And so stores are becoming big fulfillment centers. And so it's now caught up, it's almost that the US is catching up to that level of transformation and possibility of having stores playing a meaningful role in fulfillment.
Edmond Mesrobian: So that's one example. The other, I think, is just contactless and the embracing of contactless in the UK and Europe and the rest of the world, is so farther ahead than in the US. And now we're playing catch up. So those are the two examples of customer journeys and experiences that were farther ahead in Asia and Europe, than say in the US. But these are rapidly changing now in the US.
Chet Kapoor: Thank you. That's a great perspective. What technologies are you super excited about nowadays?
Edmond Mesrobian: Clearly, the evolution of cloud technologies and different kinds of computing models. They keep on evolving and they offer just a lot more flexibility so that you don't have to carry infrastructure with you. Probably the biggest transformation is that the infrastructure required to really build something wonderful and world-class, it no longer requires you to be the infrastructure provider in every sense of it. There are advantages to having infrastructure in terms of the kind of... Whether it's your own version of Cassandra on-prem versus the cloud, right? There's reasons why you'd want to have a mixture, a hybrid and so on and so forth. But more to the point, a lot of those technologies are quite now in the mix and in the large, and you don't have to invent at that layer and you can put more of your fuel at inventing at the customer edge.
Edmond Mesrobian: I think that the biggest disruption that is happening is that if you think about analytics and how to embed analytics into an enterprise, how to get an enterprise to be always receiving signals, be able to transform those signals into action, the industry spent 20 years building major ecosystems so that we can measure KPIs and produce KPIs. The leaders and disruptors today all have these capabilities to actually generate predictions at low cost. And it's those predictions that drive interaction with customers, whether it's self-driving cars, whether it's algorithms for logistics and so on and so forth. And I think it's like the new playing field is do you have the wherewithal to be in the prediction game and leverage predictions to drive your end-to-end processes that drive your business. Those are the problems of today because they then give you an amplification factor of how you can actually reach your customers.
Chet Kapoor: And the prediction part, you almost said and let me see if I got this right, is like all the enabling technologies, whether it is database technologies, whether it's analytics, whether it's compute, whether it's storage and clouds, all of it comes down to, in your mind, of being able to do some predictive action as close to real-time as possible for the customer.
Edmond Mesrobian: That's right. I mean, in some respects, if you think about... KPIs were about reporting the news of the past or giving you some signal of the present. But every one of the kind of AI driven or machine learning driven kind of enterprises of today, are very much about leveraging predictions, generating predictions, actuating those predictions, measuring the feedback, and then always in a continuous learning mode. And at Nordstrom, we've embarked, like many others I'm sure, embarked on an event architecture. So, real-time or near real-time streaming, to be able to go and to collect those signals, transform them using rich AI models of different flavors and then most importantly, not just stopping at that to then generate a report that someone else could then action, but actually putting them to work.
Chet Kapoor: In near real-time, because I'm a consumer, I'm on a Nordstrom app, how do you say Chet is looking for shorts, but he would like to get a shirt as well because that's what he's done or customers of similar pattern do the same thing? Right. And that's what you're driving towards.
Edmond Mesrobian: That's right. It's contextual, right? If you think about it, it's being relevant in the moment. I need to be able to the sense what you're doing now but I need to be able to go and marry that with what you've done in the past and then formulate a prediction of what is the next best action to try to get in front of you. And whether that's on the website, in the app, on a call center call, in front of a sales colleague in a store, you want that same Edmond to show up there and that have every one of those, either systems or colleagues, be able to go and leverage that prediction capability to then assist you to provide service. And at Nordstrom, we have a rich history in service and we are very much a service organization. And so, being able to enable our team to do a much better job to delight you, to, as we like to say, help our customers feel good and look great, look their best.
Chet Kapoor: It is obvious to be predictive and contextually, and you need the context to be predictive. But do it across multiple channels, whether it's on a phone or whether you're in the store, absolutely. And everything and all the innovation is about making that happen for Nordstrom's right?
Edmond Mesrobian: The trick and the magic is not, as many companies you get on this journey, you have to kind of break down this silo view. In retail, you start with the history and most retailers have a very channel specific. You have a large format, small format, off price, full price, so on and so forth. And you design systems around those business models. And what you have to do is separate that the business models should be enabled by a common platform. And that customer that navigates from a rack store to a full price store or vice versa, it's still the same customer. And what you want to be able to do is reason about them as the same person.
Edmond Mesrobian: That's what's hard, that 360 view of your customer, the 360 view of your products and assortment you're offering at any edge in your network, at any part of your business model and then be able to fulfill that equally across any part of your network. That's what makes the problems interesting and have a sense of challenge to them because it's nontrivial. And then the infrastructure and the solutions and all the technologies that have been developed over the years, how to bring them to bear, to solve the problem is what makes it fun.
Chet Kapoor: It is certainly an interesting environment with COVID. Has it affected the way you lead?
Edmond Mesrobian: It would be hard pressed to find anyone on this planet that hasn't been impacted by COVID in some way. And papers are full of the impact of COVID on retail. So I think that's well-traveled ground. I will say, I think what COVID has done maybe, to put it succinctly, is that it's provided focus. When you're in a moment of unprecedented disruption, those kinds of moments require focus of attention. You're not trying to solve 10 things. You're just trying to solve one. And you're also taking time horizons of, "Okay, I have a five year plan, a three year plan." No, we have a three week plan.
Chet Kapoor: Yeah.
Edmond Mesrobian: And so I think what COVID has done is the focus of attention. It just narrowed the aperture to the moment, the now, and actually for the entire executive team and the company. So, it's a lightning rod that has created a focused opportunity. If you then use that focused opportunity, then you could figure out, "Okay, how do I use this to accelerate my transformation? How do I use this moment as an inflection point for positive, to turn a negative into a positive?" That's the journey we're on.
Chet Kapoor: It's really interesting, Edmond, you say that. We talked to 1400 different enterprises recently and one of the questions was what accelerates your transformation? And option A was CEO option B was CTO/Chief Digital Officer or Chief Data Officer and option C was COVID. And a majority of the people said COVID, right, by a distance.
Edmond Mesrobian: That's right.
Chet Kapoor: Right?
Edmond Mesrobian: Yeah. It's because the reason for that is, if you think about pre-COVID world, you're trying to optimize a number of problems, a number of business units, a number of challenges. And your resources and your ability to go and affect every one of those opportunities is constrained. Everyone's constrained at some level. But when you get COVID, what it makes you do is actually make tough choices. And choices are hard. It's easy to decide what to do. It's actually incredibly hard, what to stop. And COVID has really helped us really figure out what to stop, because once you do that, it's very apparent what needs to continue and accelerate.
Chet Kapoor: It kind of does narrow the aperture, as you said. That's a great way to look at it. Shifting gears, if you go back in time 15 years ago, what advice would you give yourself?
Edmond Mesrobian: Oh gosh. I guess I would say, first is, make sure you're having fun. And make sure that you're putting yourself in a challenging position, one that you can learn from. So solving the same problem over and over again, you can do that, you can have a rich career doing that. That's why I went to different industries. I was at Disney. I was at Real Networks, at Expedia and Tesco and every one of those had a unique problem. And it also had problems that had scale and depth to them. And so I would say, make sure that you pick a problem space that has depth, that has complexity, that has scale, and that you can learn in because if you do that you will stay relevant and you'll have fun.
Chet Kapoor: I've always had this thing that everything I do has to have three components. Smart people, solving hard problems, having fun. Right? It seems you come from the similar school, right?
Edmond Mesrobian: Absolutely.
Chet Kapoor: That's awesome. What inspires you?
Edmond Mesrobian: What inspires me is just seeing teammates, teams succeed when you set out on a challenging transformation. What inspires me is when people start coming together, that it starts to gel, that the momentum builds. You take a bunch of individuals and you create a team that really starts working well and just overcome something that they didn't think was possible, they didn't think was solvable. And when you can do that, you feel you've made a difference. And so that's what inspires me is when I feel I made a difference, I've helped someone get better. Even if it was just a 00.1% I contributed, I just like the idea of helping advance a problem, advance a career, advance an understanding and advance a company's potential. That's what inspires me.
Chet Kapoor: I know from our personal interaction, I've certainly seen you interact with all the teams that you have led exactly that way. And they certainly feel inspired by the fact that you're there to help them. And this is where some of your, "I'm here to teach and I'm here to be a mentor," shows up. Right. Is that fair?
Edmond Mesrobian: Absolutely. I can't imagine. I mean, I think we've spoken about this many times, Chet. When I retire, whenever that moment will occur, I'll go back and teach if they'll have me. Because the idea of being around, I will say kids, I don't mean that disrespectfully.
Chet Kapoor: Young minds.
Edmond Mesrobian: Young adults. Young minds that want to learn and are eager to learn. That's just magic. Those are magic environments to me.
Chet Kapoor: Edmond, thank you so much. We really appreciate your time. I think our listeners will find this to be extremely useful.
Edmond Mesrobian: Well, thank you, Chet for having me. Nothing but the best. And look forward to seeing you soon. Take care.
Chet Kapoor: Take care.
Narrator: We hope you enjoyed this episode and can take away the three valuable lessons. Have fun. Put yourself in a challenging position and make sure that position is one you can solve problems in. In other words, pick a problem space that has depth, complexity, and scale, so you can stay relevant and have fun.
Narrator: Thank you so much for tuning in to today's episode of the Inspired Execution podcast, hosted by Chairman and CEO of DataStax, Chet Kapoor. We have many more guests with phenomenal stories to come. So stay tuned. If you haven't already done so, subscribe to the series to be notified when a new conversation is released and feel free to drop us any questions or feedback at InspiredExecution@datastax.com.