How incorporating digital trust can create a secure digital world

In this episode of “Better Innovation,” Global Tax Innovation Leader and host Jeff Saviano interviews Hank Prybylski, Global Vice Chair of Transformation at EY.

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Are you incorporating “digital trust” into your digital transformation efforts? Hank Prybylski breaks down what it means to incorporate mission-critical trust elements into a successful digital transformation endeavor. In his role as Global Vice Chair of Transformation at EY, Hank helps business leaders approach innovation through an emphasis on courage and curiosity, with insights they need to build resiliency – especially important as we emerge from the global pandemic. Jeff and Hank cover a wide range of transformation and innovation topics, from digital governance and maximizing AI effectiveness, to mitigating biases within data. Take a listen, we think you’ll really enjoy their free-flowing innovation conversation.

For your convenience, full text transcript of this podcast is also available.

Jeff Saviano

Hello to all my better innovation friends. It's Jeff. Well, we're moving our way through season four. I have to admit, we never quite know when we start our season who the full range of guests will be. But we're having another great season of amazing guest to join the show, and today is no exception. We have Hank Prybylski on the show with us today. Hank is the global vice chair of transformation here at EY. That means that Hank is the one that's steering our ship for innovation and transformation. As a matter of fact, he helped us discover through the preparation for the show today that there's been an important topic that we haven't really dug too deeply into on the show. And that's the intersection of trust and transformation.

So, if you're embarking on a transformation effort and let's face it, in 2021, it seems like every organization, as it readies to emerge from this pandemic is transform coming in some important way. So, if you're going through some form of transformation, then you'll love the lessons from Hank today. Here you go. A conversation about digital trust and transformation.
Hank, welcome to the show.

Hank Prybylski

Thank you, Jeff. Glad to be here.

Saviano

Really appreciate coming into our virtual Better Innovation studio today. And I have to say, Hank, in preparing for today's show, our crack research staff discovered that you started at the firm in 1987. Did we get that right?

Prybylski

You got it right.

Saviano

Quite a run.

Prybylski

Yeah, it's been a great experience. I've worked with a ton of different clients in different industries. As part of today's conversation. And have seen different innovations come through at different points of time. And really then I enjoyed the process of watching them learn how, see markets transform and take advantage of those innovations.

Saviano

Great experiences for what you're doing now. And we're going to talk a lot about that, especially because you've had a fairly recent shift in your focus of your work at the firm, and you now lead the charge for innovation and transformation.
Tell us about your experiences, Hank, that led you to this point and what your new area of focus is all about.

Prybylski

Thanks, Jeff. So, as you said, I'm currently the Global Vice Chair for transformation at UI. So, I see all our organization wide innovation and business transformation efforts really look into how we line all our people and focus on this journey of creating long term value and long term value creation as we drive to building a better working world purpose. And it's really exciting. One of the things reflecting on my experiences and both in the last year and the last 30 years is innovation and transformation are inextricably linked. And I think, you know, a little bit of reflecting as you and I've talked a lot, you know, I would say innovation is kind of the courage and the curiosity to think about a boldly different future. Right. And we're blessed to live in an era where we've got new technologies and new technology delivery models creating so many new opportunities. But it's also when you couple that with transformation, and I'll say that's the discipline and determination to help you get to that bold future. And you got to have create that that right alignment. And looking at the business leaders of the past and business leaders today in the future, it's those that kind of put those together, but also have a cultural framework and a talent framework that supports those activities.

Saviano

And I think just for the benefit of our audience and our firm, as close to 300,000 employees, 700 offices, Hank. 150 countries and so maybe talk a bit about that just the scale and the breadth of an organization like EY and thinking about transformation on such a broad scale. It's really amazing.

Prybylski

Yeah. And I think one of the things, Jeff, that's been in a global business like ourselves, which is in such close proximity to client issues and close proximity to all the experience opportunities at a global scale, you're really able to see across different industries, across different markets and spot, you know, patterns of change and really the opportunities of leadership.
And I think in an organization like EY, this such an inherent culture of collaboration, connecting those dots with speed is really a key to our client service. And it's been just such a great platform to help drive innovation and transformation.

Saviano

And you've spent many of your years, Hank, with the financial services organization like EY, which is also really interesting because we look across, for example, technology adoption, something you and I have talked a lot about.
And many financial service firms have been on the early stage of adopting those new systems. Do you think that gives you a unique vantage point now into the cross industry opportunities that you talked about?

Prybylski

Yeah, you know, Jeff, when I make early days of my career, you go back to the late nineties, it was really financial innovation that got me started in this journey that it was derivatives at the time.
And how did how were derivatives changing the risk, the risk sharing models and the client opportunities, but also importantly, how do you need to embed those in your risk systems? And when you have the same issues, you'll see that today around AI. So that kind of gave me an opportunity to drive. But as I did a lot of work in financial services and then started doing more work in other industries, I quickly realized there are so many cross-sector opportunities.
Right? Firms that think about innovation, obviously from a customer lens but also look at opportunities across sector. I think that's really what's driving a lot of activity today. So, go to meet with oil and gas companies and they would say, Hey, we like the way maybe the banks manage their data and the analytics, or maybe the banks like the way a manufacturing company approaches the operational discipline. So really kind of spotting those patterns. And then as I traveled globally, you just see it more and more when you get to different markets around the speed of transformation and opportunity to learn and drive.

Saviano

Yeah, I love that associative thinking and I know there's so many great examples. For example, in automotive that now you have Silicon Valley owning the dashboard and the entertainment systems and the opportunities feel like many of our great innovations have come from applying something that worked in one sector to another. Right? If you think about it, like what's really new, if you really uncover the linchpin of any new solution a product that you probably find an application outside of your sector. So, I think that that cross-industry experience has to help in a role like the one that you're in now.

Prybylski

Yeah, and it's just time and time again. You know, it's going back to innovation and transformation, you know, finding that, you know, what's that, what's that change that you need the driver and the opportunity to drive and you have to put a lot of fundamental R&D into it. But there's also opportunities to look across and leveraging.

Saviano

Hank, one of the areas I know that you're really passionate about is the embodiment of trust within digital transformation.
And I've heard you refer to this, and you've written about this as digital trust. I'm so curious to know how do you define digital trust? What does that mean to you? Unpack that a bit for us.

Prybylski

A lot of times when you say, well, what is a digital transformation that we're it's probably, you know, often overused when you get down to it.
You know, leading firms are looking for opportunity to create new customer experiences, new employee experiences, and let's call it new supply chains. Through digital technologies and the accelerator in that. And we all experience that today as customers. You know, there's huge opportunities in the B2B world to experience that. So, as we said in digital transformation, I'm sure a digital your favorite digital experience popped in your mind.
But in order to create that new experience and so often there's the trade off on creating an experience with information, so that you can align that, you can personalize that and often. So maybe you can accelerate that. And that that handoff between experience and trust is so critical to continuing that journey and that's playing out it in today.
Whether you think about it from a data privacy perspective of wanting to personalize an experience more for you, it would be helpful to know what you value, you enjoy. So, as we open up that and at the same time you get to protect that information and it's protected both in a sense of a cybersecurity sense, but it's also protected in a sense of the individual customization of how they like to be handled from a privacy standpoint.
And I see in many ways the exciting digital journey. One comes with a, you know, an inherent trust requirement.

Saviano

And trust is a very human nature. Right. And that's I think that's what's so interesting about the term and it caused us to take a look back. I think your guest 65 or 66 or so that we've had on better innovation over the years.
And we went back and looked to see have we ever really talked about the trust innovation paradigm. And I think it's been a gap. So, thank you for that because I think it's important for our innovation audience and all the issues that we've talked about. We've never really unpacked this trust innovation paradigm. How do you view the importance of trust, for example, in new applications of digital technology?
Why don't we start there?

Prybylski

Yeah, no, I think there's a fundamental you know, what, what we're seeing to really kind of engender that trust in an enterprise level. Business leaders really got a start, but is building in integrating operationalizing it day one, right? And it's not you know, there's an old I as you, So I grew up in the risk management world. We used to have this concept of lines of the fence, which is, you know, very linear approach. And with the speed of the market and technology advances, we need that all much more embedded upfront. Right. So really, you know, in a model where that that risk intelligence, that risk landscape, you know, is built into the customer and employee facing interactions, you know, right from the beginning and a very much of a journey of how do want to handle that the employee in the customer what is the opportunity from the digitization. And as you're doing that, think hand in hand with the implicit trust and risk issues are around that. So, you're designing that you know right up front. I think it's very consistent with kind of an agile approach. But, you know, you really need all the different perspectives lenses at that table.

Saviano

Yeah. You're not retrofitting it afterwards. You don't have a team come in halfway through the transformation and then deal with it at that point. So, I think that's such an important lesson for the audience getting it in the design phase, how important that is. I want to go hang to a great piece that you wrote for Forbes and really appreciated this contribution.
It was on the inclusion of these trust principles. So, sticking with trust in, you wrote about the inclusion of trust within digital transformation. And in that piece, there were four specific areas of focus that you felt was important for anybody embarking on a digital transformation to focus on, to integrate trust within those systems. So, I thought it'd be good if we could just walk through those four and let's unpack that a bit.
How does that sound?

Prybylski

That sounds great, Jeff. Thank you. We love to. Love to share. All right. Let's drive in and maybe I'll kind of lay out those four areas, and then why don't we kind of go through each one and continue the dialog? But, you know, if you think about those four pillars around this, this trust in digital transformation, first head on addressing the cybersecurity challenges and opportunities.
Right. Second, mitigating any potential data biases just can't just to make sure we don't let that creep into the into the dialog or even have room for an opportunity categorically yeah. That's right.

Saviano

Yeah. Categorically.

Prybylski

fortifying digital privacy right around that. And then lastly, this ongoing process of strengthening governance and internal control. So, let's cycle back up to cybersecurity.
And I would say, Jeff, going back, you know, this is this is not a new issue, right? Just like not just like AI. is not a new opportunity. Right. It but it is one just because it's been on the top of minds of boards and business leaders. You know, I think you're even seeing it become acceleration of its pervasiveness and profound this.
And you just look at the lessons and needs of the last year, which have just been unbelievably profound of how businesses have had to adapt so quickly to the pandemic and the acceleration of remote working, the continuing sophisticated and cyber challenges of how we keep driving on that journey. I mean, I've always kind of viewed as a tradeoff of the digital journey with the cyber security protection.
And that's when we look at why we've had our own innovation. We put that, you know, squarely at the funding with blockchain, artificial intelligence, IOT, 5G, cyber security, if you put the ones in, say those are great for new experiences and then we'll deal with the risk issue later, you're going to have a major gap. So, it's really that whole perspective of balancing an interlock on that and get in.
Getting back to the design and development up front, I think particularly also we're seeing a lot of clients as they're activating their public cloud strategies, huge opportunity for transformational change to an organization, but continue to think about not just the technology piece, but also the skills of their employees and what are they upscaling the employees to deal with that they understand the tools and the methods they're investing the processes and the metrics around monitoring technologies, and they're just continue to confirm what they've built for cyber resiliency.
And I think this is going to be a trend you continue to have and you're just seeing, you know, some of the leaders of the technology investment world or in cybersecurity. Was that just a recent great conference, Montgomery Summit? And so many advances in the cyber security area? That's it's super exciting.

Saviano

I'm glad that you started here and I hope our better innovation audience go check out the piece. Just can google, Hanks name in Forbes and you'll find it.
It was just published last month. And if you look at the cyber issues hanging, can you talk a bit about it that these risks are becoming accentuated because let's face it, everybody's working remotely so you've got more connection points and nodes within an organization. And the cyberattacks are becoming more prevalent and more sophisticated. Is that the perfect storm?
Is there a reason why you started with cyber that are you concerned that the risks are just getting heightened? And this has to be an area of focus for companies?

Prybylski

I think we stay start there because I think it's I don't think the path of digital transformation is going to slow down. Right. Think about the societal benefits in a pandemic of e-commerce and telehealth.
Right. You know, and the opportunities come out of Iot and 5G and autonomous systems of manufacturing. The opportunities are there. What we want to make sure is from a proactive and a defensive approach, you're managing your risk profile at the same speed as your opportunity profile. And when I look at my experiences over the last 30 years where there's been, you know, more systemic issues, it's when though, that gap really widens too significantly.
So that's a little bit of a continue for action. I think organizations get it. But as we as we look forward, that is just something you can continue to pace. There's a quote that I picked up from a cybersecurity leader that in some extent, you know, the pandemic made, you know, our digital transformation journey it was 2023, became 2020 all at once.
So, we have a real compression of the speed of transformation. So, we want to make sure that we're moving at that speed in the right balance an area and just continually to the kind of drive that it's also not just as you pointed out in your piece, it's not just about the bits and bytes of technology either it's increasing your capacity of your employee.

Saviano

So, there's a training in employee knowledge. There's internal controls and ensuring you have the right metrics and processes around it. And that was one of the takeaways that I had from the piece Hank and from some of our work together is that how important it is for organizations to think of the breadth of, for example, here with cyber and how it impacts the organization, not just in the actual technology itself. Is that fair?

Prybylski

Yeah, no, that's a great point, Jeff, because you look at it a lot of time, you could immediately think of cyber and you go to the technological defense of the perimeter and the safeguarding of your most precious assets. But when you look at the breaches that have occurred, often, you know, it's been more of someone opened up the door because they didn't they get fooled by a phishing email or it was more of an insider, you know, so the it's really that holistic approach to the cyber that as you just pointed out, you know, there's a lot of advancements in technological protections, but also, you know, making sure you're all inside your training side, your team side of the whole the whole perspective is really balanced. And I know that's one, you know, we work with our clients and we work with ourselves just to kind of ever improve on.

Saviano

And this may be obvious to the audience, but to bring it back to the focus of our discussion, having to trust, if companies don't do this, it will jeopardize the trust that employees and customers have in the organization and in products and solutions.
So important. Okay, great. Off to a great start. Let's go to the second one. Mitigating data bias is why is that so important? What's the old mathematical model?

Prybylski

All models are wrong and some are useful. I like that I'm going to steal this. And all models are representations of reality. In an ever more incredible advances in in chain learning and artificial intelligence and autonomous systems, we're seeing the opportunity to place more and more rely on these models, you know, as we do so, we want to make sure that the models reflect the same, you know, eliminate or, you know, don't support any sort of data biases.
And that's that you really want to make sure in your building up front into the system. So, what we've been recommending is, is, you know, as you're laying out these data design processes, you really make sure the business is very familiar and I'll say this is one, we're working my clients, they're leaning in very well on this. They understand this and they're working hard on this, but, you know, really familiarizing.
And if they're building their model development cycles and design that you're involving the risk professionals, the cyber professionals, the privacy, the model risk professionals. You know, I grew up in the banking world and what we were constantly learning from your models and how they perform in normal cycles and how they perform in stress periods and how do we continue to back to. So, a lot of this model risk as well as the traditional regulatory compliance to make sure that as we are doing this design process, you're combating the potential for biases.

Saviano

And the risk here is if your underlying data that you're using to train the models, if that's bias, then it will only perpetuate the bias as you're building, for example, an AI system to improve decision making or to make recommendations.
And we see it, for example, maybe just to give a couple examples, Hank, what about recruiting? Like how is this an issue in recruiting?

Prybylski

Yes, spot on, Jeff. You know, you look at recruiting to look at underwriting all areas where there's been historically, you know, somewhat of a model or methodological basis. And we want to make sure that that from the insurance of the equity of opportunities and the areas that that those models are reflective of the goals and objectives of the organization and reflecting the perspective of the individual.
So really try to make sure that that is done in the most unbiased fashion.

Saviano

I'll remind our listening audience, Hank, we had season two of Better Innovation. Ross Picard was on the show. She leads the affective computing research group at MIT Media Lab, and we talked about the why behind AI and how, in her words, that the risk of putting too much trust in an AI system, that there's still a need for us humans to partner and coexist with this technology can't let AI systems run amuck. And in order to do that, we're not quite ready to hand over the keys to the machines and I just think it was a great lesson. And remind the audience, if you want to check that, I'll go back in season to Ross Picard is a real leader in the space, and she opened my eyes and to the importance of the human in the loop, which I think is a key element of what we're talking about here.
Right? You can't just let the machines run.

Prybylski

Yeah. And I think, Jeff, that's a great human in a loop metaphor is I think really in the process of what we're doing because all these processes are, you know, when they're decision making and judgment. And we want to we want to continue that criterion there. And I think that human in the loop, if that's a kind of a Northstar, is a good metaphor for phrasing.

Saviano

All right. Let's shift over to fortifying digital privacy Why is that important?

Prybylski

Yeah, I mean, when you look at the trend in the trade off the there's so much individual information is in the market for good. You think about the potential opportunity for digital twins in a health care setting, right. Reflecting our individual situations where we're naturally or somewhat as the market is more and more people are giving up more data than ever.
And you're seeing as someone in this pandemic temperature checks and phone numbers for contact tracing and the direction is, you know, more personalized information, more business information, a loop on customization of experiences. But at the same time, you know, it's very important, just like we said on the cyber, that, you know, individually, organizationally, people are comfortable that data is secure and that data is being managed in the accordance with the perspectives of that individual.
So really that 24x7 - 365 friction was kind of control around that. And I think increasingly and then you're seeing on the government side of this and the policy, you know, kind of continue to grow into this is that, you know, organizationally they can really continue to lean in and have, you know, a robust, holistic, risk based approach to this management of privacy. And I think, you know, as you think about a risk management paradigm gone from again, I grew up in banking where we had you know, we had models for market risk and credit risk and then operational risk as we've gone to a much more experienced based economy. And technology is becoming more of the core essence of almost all businesses and the application of these risk approaches is getting into areas like privacy.
And I think you really can take a very traditional risk management based approach to that and making sure that you've got it well understood, particularly as your business model is changing.

Saviano

And you fortify perhaps by operationalizing it. So, you embedded in internal controls and processes. They also really liked about what you said, Hank, in the piece, and you made a reference to the National Institute of Standards and Technology that they have a framework for operationalizing digital privacy. And I think it's such a great lesson for the better innovation audience that if they're early in this journey, they're not alone. And so, I was poking around a little bit on this NIST framework, and there's just amazing self-assessment frameworks and archetypes of desired future state profiles and even help with communications within your organization. That I just think it's a great place for people to go. Maybe talk a bit about frameworks like that and the role that they play.

Prybylski

Yeah, no, I think if you look at it, you mentioned Nest right there. You know, this concept of maturity models. You look at the regulatory environments of maybe what's not in your regular sector, but maybe what's going on with GDPR in Europe. You know, these regulatory trends as well as maturity models provide a great framework.
You know, I've always been struck by the leading organizations tend to lean out and look for these models, even if it's a little bit farther on their current industries tech technology perspective, because you can really infer a lot of directions of travel as well as learnings and best practices. And I think, you know, I just really give a quick way to kind of, you know, lay out vulnerabilities around that same thing.
On the cybersecurity a lot of really good, you know, frameworks around that. So, something I would definitely do.

Saviano

And these are not isolated frameworks. I was looking at some other work that one of our colleagues Tony Tobias wrote a piece at the end of 2020 and about the need to embed privacy principles directly into a company's operations and don't treat it like an isolated framework.
And I thought that was a really good lesson too, that these aren't standalone privacy teams that are hold off from the rest of the organization. And the frameworks and the teams have to be deeply embedded throughout the company.

Prybylski

Yeah. No, I think that Jeff, that's a good point that Tony was making because I think it was really getting to the essence is this concept of digital trust makes it a business issue.
It's not, not partaking it in isolating it to be a separate compliance issue.

Saviano

Okay. Last one Hank, strengthening governance and internal control systems. And this one was really important to me as I was reading through this. We spent a bit of time on governance and the need to modernize the systems and talk a bit about why governance and internal controls are important.

Prybylski

You know, Jeff I was reflecting on this. One of the things I've always found organizations if they get in trouble, it's most often the risk that was not on the governance team's agenda. Right? You know, they kind of manage the one. So, it's really, you know, when you get, I think a good governance internal control framework really challenges that level of thinking.
And it's also the management teams that look across the organization and have the conversation. They can spot emerging risks in one business or region and think about it. So, it's really if you start to think about your governance, business and risk and are have you having a right level of conversation and a right formal understanding, you know, there's the first step making sure your risk managers are keeping pace with your organization and this transformation program. So, you know, given the pace and the speed of how quick we've moved, you know, are we funding or are we investing, we are approaching it, we have the right level of identification. Do we think about it? You know, do we have the measurement and monitoring processes so we will understand our level of risks? And are we running at the speed of the business?
I said it earlier, there was a great quote. I heard from one of our, my favorite technology companies, and they said, ‘we've never moved as fast as we did in 2020 and we'll never move as, you know, slow again in the future.’

Saviano

That's great. Yeah.

Prybylski

This kind of alignment on speed and I think speed and change at the same time, a lot of what we've heard from the pandemic is companies have learned they can move fast and they're almost emboldened to move faster now as they respond to you know, market opportunities.
So, it's really kind of thinking about the, you have the governance framework in place. So, you know, if I was thinking about where you would try to line that up your data know, do you have an AI governance framework that really addresses all the data related risks, cross-functional oversight and transparency? Are you embedding that digital governance into your overall business strategy and really having an understanding of where the AI frameworks can drive it and thinking about the ethics around that?
If you're leveraging your risk frameworks with analytics to couple with the advances, your data technologies, and that's one as you become a more model based company or your models keeping pace with your activities, really, then I think also importantly, are you training the organization on that program? So, you're a lot of times as firms look to advance and mixing the changes, they may bring one part of the business, one part of the function along, but is a knowledge of that level of change gone out through the organizations so that you're all kind of commonality.
I look at, like EY we've implemented a program called Badges, self-learning on, you know, incredible digital topics so it's, you know, back to that 300,000 employees in our goal is to make sure they all are you know everyone's advancing on everyone's to, you know, kind of lean in on that. It's not just the data scientists who need to have advance, it is an organizational wide approach.

Saviano

I'm so glad you raised it, Hank. And I'm glad that governance made its way into one of your four. It's a hot button for me. I actually think that the governance gap in many organizations, I think that in this space, perhaps that's because of how fast these advanced technologies are progressing. And if you think about governance, isn't it really about decision making and roles and responsibilities just, you know, take that piece of governance alone?

And because of how powerful AI systems are, many organizations just haven't defined the roles, responsibilities and who has decision making rights around. And so until you do that, sometimes it can get a bit chaotic in terms of how the organization could take advantage of it. And I'm just curious to know if you think that that's a correct statement.
And if so, then, then why is it so important for companies to focus on governance? And what does that look like? How do they make sure they have the right governance in place?

Prybylski

I think governance is a big word and a lot of times means a lot of different things to different people. You know what I think what we're really talking about here is do they have the organizational alignment, the organizational and say, checks and balances to make sure that the pace and opportunity of the business and the control of the capital, the risk is it's keeping in pace with that.

And then that, you know, to some extent that you're keeping those things in a balance. And that's, you know, often alignment between the businesses, the support groups and other stakeholders and the board kind of in a good balance around that. And everything is getting the right level of pace and funding. If you want to make sure there's not a dislocation of that balance, you know, from an opportunity and a perspective.

Saviano

I like that. Yeah, that's a really good dislocation of balance and it's a good way to put it in alignment where you also use the word alignment. How important that is. And because in many cases, because of the power of these technologies and back to our focus on digital transformation that it's new for many organizations. So, they're probably addressing governance issues in this area for the first time.

Prybylski

Yeah. And I think one thing, Jeff, that you know is a little bit we're seeing on this issue of governance, and I think it's why it's hard with digital transformations. It's used to be things with firms leading in the head of either a burning ambition or a burning platform. Right. Now, with the stakes so high on a digital transformation and in the speed of the market off of your burning platform, you're burning ambition is all the same. So, you know, as firms lean into these digital transformations, it I mean, it's there's a duality here.

You're either going to get it right or you're going to get it wrong. Right. There's really nothing in the middle anymore. So, I think this, you know, making sure that you've got the right controls and funding are, you know, super critical.

Saviano

We had on I'll give one other shout out to another episode just a couple of months ago. I think in this season four, we had Sheila Warren on the show and she leads Advanced Tech for the World Economic Forum. And we dedicated an entire episode to governance and the gap that exists in one of the areas that Sheila pointed out was and talked a bit about blockchain. And I love how she put it that blockchain is a team sport and it's not just about blockchain, but how much of governance is turning into multi-stakeholder governance. And so, you look at it, our clients and companies listening to the show today that governance is very quickly becoming about governing issues and decision making across organizations. And if we think it's hard to just govern within the four walls of one organization, then I think that these technologies are allowing us to do more multi-stakeholder older and not just as Sheila pointed out.

It really raises the stakes, doesn't it, on what good governance looks like.

Prybylski

Yeah, I agree, Jeff. And as you look at a lot of digital transformation strategies, as you're looking at more, I'll call them ecosystem partner platform plays. So, you're getting into much more of both company situations that'll complicate that. Governance. And I also think is, you know, you're seeing a little bit of a trend to an as a service model where more traditional commercial models are being split between experience layer and the asset layer.

So, this is as we continue this trend in and plays out, that governance and multistakeholder involvement will continue to be a lot of changes around that.

Saviano

Okay Hank. That was really good. That was a quick tour for the audience. I think very concrete steps for our audience to create greater trust in the outcomes of this digital transformation effort.

And isn't that really what it's about, right? Creating trust in what those outcomes are. That's what you referred to as digital trust. We pointed out a couple of times today that there really is an incredible pace of change that's happening not just within EY, but for the clients that we represent, especially as we emerge from the pandemic.
So, these issues and addressing these four items, they don't have to slow organizations down the way. And maybe just one last point as we come out of this, and I'd love your thoughts on that point, that it's not as though addressing the four issues that you outlines would have to slow the transformation down. But in fact, that's so essential to get the buy in from stakeholders. Do you think that's right?

Prybylski

Yeah, no, I think it's right, Jeff. I think in anything it speeds it up because you're approaching it with alignment day one. So, you don't need to go through a series of stop starts and kind of keeps building that momentum. Of alignment.

Saviano

I want to just add one other point about the risk function.
And you mentioned that a couple of times, Hank, and how important it is to modernize the risk function to coincide with this rapid advancement of technology. How does a company go about adjusting the way that it focuses on risk to the advancement of technology and how important that is?

Prybylski

You know, as you think about your risk profile and your business model, that the process and the approach of from a risk framework is really, you know, thinking about the expected and unexpected events that could impact your business strategy.
You know, I think having a very strong empowered risk organization at the table that a partner to the business to think about those opportunities to do that. And there's a risk return, you know, to really drive in that. And I also think, you know, I had a little bit of a comment on the lines of defense models that maybe it's too linear but the base framework of that is if you're the business, you want all the risks, right?
And you're really having that strong sense of business ownership up front around that. In my experience you know, if talking about governance, the top organizations have an open dialog as they as they were making changes to their business and as their business markets are changing, they have a, you know, an open dialog between all the groups, the functional groups, and the businesses, the different businesses about how their how their risk landscape has changed.
So, just like market opportunities change, risk landscapes change and really having that conversation, you know, there's a lot of really fancy risk reports you can write. But more often than not, having that open dialog is the most important part of the governance framework.

Saviano

Well, what an opportunity to have to focus on employee skill building. And if you think about ways to reduce risk, and you mentioned our own Badges program, you can drive programs and initiatives from the center in an organization, and you can also focus on building capabilities and building skills. And at least I've always felt that one important way to manage risk is through skills and capabilities. Building on your teams. Would you agree with that?

Prybylski

Yeah, I totally agree with that. And I think that perspective of continual learning, right, continual learning as an organization. But then, yeah, I think there's individual learning that you want to continue and there's and there's also organizational learning.
Back to that. The question I always love to get, what's the risk issue that's on my peers’ agenda that's not on mine, right? That kind of stuff. Yeah.

Saviano

What do you not focus on? Right.

Prybylski

And that and that is a somewhat institutional commitment to learning, right? You know, it's kind of looking around that it's sometimes a hard question to keep asking yourself, particularly in fast, fast business cycles like we're in today.

Saviano

Well, I think it's, it's, it's really hard. And one of the things I feel like has been a thread hanging throughout our conversation is this power of associative thinking and pulling the best out of other sectors and other industries and the importance to build connections to a peer group outside of your sector. And one of the greatest things that I did with my first year in an innovation role in the firm, I got this great advice. There was an innovation network of Fortune 100 innovation leaders that I joined. And just to understand innovation and other objectives from somebody in the retail sector and consumer products. And at first glance, you look at that and say, well, how could that possibly help me? I was focused on tax innovation. What connection could there possibly be from a retailer and professional services? But the more that we looked at it, it's about delighting your customers, isn't it, that there's always that common denominator. And I got so much from that experience and I would imagine that I hope others in our audience could from doing something like that too.

Prybylski

Yeah, no, I agree with Jeff, and that's a little bit of why I kind of use that word curiosity to be creative innovation, because I think a lot of people are curious are all, you know, often learning about, okay, well what why is this going on over here?
But I don't see it here. Is that like what is the connection and what can I learn from that? It's a great question.

Saviano

To go back, one of the things you had mentioned a bit earlier about GDPR and just as we're recording this episode at the end at the end of March, that there's been some hints that we may have federal level consumer data privacy legislation in the U.S., I think we'll certainly see greater regulation traveling across the globe. And the European General Data Protection Regulation will certainly influence that. How do you think that would impact U.S. companies if and when we see greater regulation of data privacy here?

Prybylski

You know, certainly the direction of travel on data privacy protection I would say it's increasing. Right. And you look at having our firms helped a lot of firms with their GDPR compliance. You're seeing state level rules here in the US. And this has been a topic at the federal level for quite some time. You know, I think we're, you know, continue to work with our clients to you know, obviously, they've got to have a good sense of where the regulators are going. Right. And at the same time, a good sense of, you know, I think the best companies leave the issue and their business approaches as well in advance of the regulatory requirements. And they view it as what's the business requirement for our customers, so I think having, you know, kind of progressing that and putting in, you know, risk and compliance approaches, you know, are market relevant right. And support the underlying, you know, public policy directions or the important ones. You know, I think this perspective of stepping away from the rules and the requirements, the opportunities for a global organization, you know, they're supporting customers in multiple, multiple geographies.
And there are maybe, you know, different customer preferences. But so, having you know, this is our approach, having a data strategy not only looks at the way that you're able to access and leverage data for insights, but also the same data strategy that's, you know, flexible and fluid to manage best in class privacy and data permission need strategies that can be customizable at multiple levels.
And if you look at the advancements in data fabrics and data ontologies, there's a lot of great work that's being done in the industry to help, you know, kind of manage that. So, I think the leading organizations are, you know, obviously following the regulatory trends, but building business systems well in advance of those.

Saviano

Scenario planning they're looking at possible outcomes.
What would happen and create what if scenarios? I think you hit it on the head that we can all expect that there will be some greater regulation of citizen data privacy, consumer privacy issues, and we can see that trends happening around the world. So, for our Better Innovation audience as they think about their products and services of the companies that they represent and other organizations, how would that impact and how do you look around the corner to ensure that you're addressing all those issues?

Prybylski

Yeah, and I think, Jeff, you think about the advances of potential 5G and Iot, this ability to partition protect segment leverage data is going to be a, you know, an ongoing core competence. Right. And, you know, for all organizations.

Saviano

It's been incredible just in the past few months was commenting to a colleague earlier today, the organizations, public and private, that have found us to try to learn more about just the simple question, how can I share data more effectively within my organization and outside my organization? I just take that question alone. I want to share it. I want to do it safely and securely. I want to creatively combine it. Somebody called it the combinatorial creativity of data. I thought that was really cool. How do you combine data streams in different ways in order to derive new insights? You know, speak from my own experience with never had more inquiries about that than we have over the past couple of months. And we know that that's only going to intensify.

Prybylski

Agree.

Saviano

As we wrap up the show today, I thought it would be it'd be great to think about over the next let's just say the next couple of years and one or maybe one or two things that that all of the innovators in our Better Innovation audience can take away from this conversation to help build trust.
Let's close it out with this notion of trust in new technologies and business models. What are some of the key points that you hope our audience will take away? From this trust discussion?

Prybylski

Yeah, no, thanks, Jeff. In a you know, I think one of the things we've clearly been looking a lot is this is envision this continued trend of AI machine learning and our journey toward autonomous systems to create better, you know, supply chains, customer experiences and employee experience.
So that's why this is being done is you know, as we're on this journey, you know, think about the organizational approach, the frameworks of that journey, whether it's, you know, from a principally a privacy or cybersecurity you know, align that and making sure that, you know, the organizational governance of that, the training around that, the functional alignment is built in upfront.
Right. And I think that's probably the number one thing, you know, think about as you're pursuing your innovation in R&D journeys. Make sure you're building the whole business model up front. And I don't think that's counter an agile pilot way just means that you're thinking about all those perspectives. You know, day one, not a, you know, not day 366 so that would be my number one comment.

Saviano

Such good advice. Excellent. While Hank is if as if that wasn't fun enough, we typically end our Better Innovation sessions with some rapid fire questions. You up for it?

Prybylski

I'm up for and I'm ready.

Saviano

All right, let's do it. First question, what book do you have on your nightstand? This is this is how I get my best reading advice is from all of our all of our guests.
So, what do you got? What's on your nightstand?

Prybylski

Yeah, I'm reading a great book called the The Jersey Brothers right now. It's the story of the Mott Brothers, Benny Bill and Barton, who are all in office three brothers from New Jersey who were naval officers in World War II and a story of how that played out. I like to read, I'll say history books, some historical fiction, some true fiction.
And I usually buy them that ten books at a time. I go online and I fill up the bookcase and work my way through. And I kind of go through different historical genres at once.

Saviano

Well, that's a good one.

Prybylski

So, I'm kind of on a World War to journey of books, and it's got a new journey like crazy to go on New Jersey.
But I actually like to buy books when I travel a lot, buy books in different, different regions, because I find you get a little different perspective on the history with you buy books from different parts of the world. You still buying like actual real, like real books you can hold in your hands. I have to admit, after a long conversation on digital, I still like I still like

Saviano

That was a trap.

Prybylski

You're going to find a real book on my nightstand.

Saviano

I'm the same. I'm the same boat. Although now I've been listening to more books. Just because you can do that too sometimes. So that helps.

Prybylski

I guess they're all real books. Mine just happens to be a printed paper.

Saviano

Excellent. All right, here we go. That's great number to tell us about a historical figure that you admire. Yeah, I think I love Winston Churchill. And, you know, I've loved reading a lot of different books about different periods of his life. And I love his quotes. I'm a big fan of quotes because I think quotes capture a lot of you. You talk about transformations. It's sometimes easier to capture the essence of the goal of a transformation through the real quotes, the one I've become really there's an Edwards Deming is the American statistician who wrote a book called Out of the Crisis.
And he was part of the I went to Columbia for my MBA and we studied a lot of Deming and he was involved in one of our classes at the end. And I, I found his story, his leadership quotes been particularly of interest of late. He has one of his most famous ones is talking about business, change is optional because survival is not mandatory.

Saviano

Oh, that's a good one.

Prybylski

You know that business is, you know, change is hard and you need to really lean in. He's also did a lot of incredible work around statistics in the manual in business processes so it's a little bit of that balance between leadership as well as the discipline of process. I really like he's one of my favorite ones right now.

Saviano

I thought I have to say, I thought you were going to go with one of my favorite Churchill quotes is If you're going through hell, keep going. Yeah, that's one of my favorites.

Prybylski

He's got some great ones.

Saviano

Here we go. Last question. What do you see as our greatest opportunity to build back stronger? Let's really end on a positive note, Hank. greatest opportunity to build back stronger. When we emerge from this pandemic.

Prybylski

There's been so many unbelievably tragic grief through the pandemic. As we are coming back. And, yeah, we will all come back. The thing that I was really most impressed because it's, you know, it's somewhat we should have been expected the conversations of how quickly firms realized they could move. And we have heard from more than one company that they had an organized rational learning that when their firm got together and they focused on a on the crisis and maybe it was moving to remote work or supporting their clients in a digital way or whatever that pivot was. And it was probably most intense. A year ago, firms realized that they could move really quick and they could move effectively with transformational purpose and innovation linked. So, it was this sense of speed and a sense of ambition. We've had a lot of companies come back and say, ‘hey, we are now resizing our digital transformation goals’ because we realized that burning platform and burning ambition of what was the pandemic, they're challenging. How can they create that organizational alignment outside of pandemic? And I think that I think some firms will learn how to harness that well, you know, for the good of their firms and their customers and employees. And how do we kind of maintain that that momentum.

Saviano

Yeah, don't lose that pace. The pace at which they moved and sometimes was it was quite it was quite impressive.

Prybylski

And that was a learning, right? Because it was a chat. Like it was one of those things, you know, and that was a little bit of my Edward Deming. The other one is changes inevitable and everyone will resist change. That was an organizational learning of how to move quick. So, the firms that can take that that same learning and apply it to other opportunities will have a big advantage because this the opportunities are the technologies and then what I call the exponential connectivity, those technologies for digital transformation are just so profound that it's really change management and the alignment that firms need to lean into.

Saviano

And to bring it back to our focus for today. And to and to focus on trust and how important that is. Hank, this has been such a great conversation. Thanks so much for coming on the podcast and sharing your new roles and responsibilities and some wisdom with our audience. We appreciate it. We'll have you back someday, Hank.
Thanks so much.

Prybylski

Thanks, Jeff. Excited. Have a great day, everybody.

Presenters

Jeffrey Saviano

EY Global Emerging Technology Strategy & Governance Leader

Podcast

Episode 6

Duration

51m 45s

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.