William (Bill) Nuti, Chairman, Chief Executive Officer and President of NCR Corporation, delivered the following address at the Atlantic Legal Foundation’s Annual Award Dinner on April 2, 2014, as the recipient of the Atlantic Legal Foundation’s Annual Award. The Editor presents Mr. Nuti’s speech in its entirety.
It is truly an honor to be with you this evening. I want to thank the Atlantic Legal Foundation for recognizing me with their Annual Award. I’d also like to congratulate Evan Chesler on his Lifetime Achievement Award.
What I’d like to spend some time speaking with you about this evening is something that I care very deeply about. It’s been a guiding light and driving force throughout my life. It’s called reinvention.
During President Obama’s second inaugural speech, he said the following:
America’s possibilities are limitless, for we possess all the qualities that this world without boundaries demands: youth and drive; diversity and openness; an endless capacity for risk and a gift for reinvention.
If there’s one thing that I have learned in my life it is this – having a gift for reinvention is only the beginning of the journey. If you want to achieve success, it takes vision, imagination, disruption, and speed, while recognizing there are no shortcuts.
I was raised in the Bronx projects. The word projects typically evokes a visual of a neighborhood filled with low-income housing, people barely scraping by to make ends meet, not to mention the criminal element always lurking around the corner. For me, this was the place I called home.
My parents were hard-working Italian-Americans who only wanted what all parents want for their children – they wanted to give me the opportunity to pursue my dreams. And when you’re born into a challenging environment, you spend most of your time dreaming of a way out – a way to a better life – a way to “reinvent” your circumstances, so your past doesn’t define your future.
My first brush with reinvention was my first job as a nine-year-old newspaper boy. Delivering newspapers in apartment buildings with no elevators was no easy task. You would start your route at the bottom of the building, work your way up to the top, and then you would walk all the way back down to the bottom again and over to the next apartment building – and start all over. So, I thought to myself – there has to be a better way to do this.
The next time I reached the top of an apartment building and was finished delivering papers, I simply walked out onto the roof and jumped, yes jumped, to the roof of the adjacent building. This became my strategy for delivering newspapers day after day. For the record, maybe the buildings weren’t so tall and maybe the distance of the jumps wasn’t as far and dramatic as I remember them to be, but nonetheless, I had reinvented the newspaper boy delivery process in New York and I lived to tell about it.
Fast-forward to the times we are living in today. It seems like everything around us is being reinvented, from our methods of communication to how we pay for goods and services. Reinvention is essential for survival. Think about how many iconic companies have just disappeared because they failed to reinvent.
NCR is an iconic company that was founded in 1884. Just think about that for a second. How many companies can you name that have survived for 130 years and countless eras in history?
When I was hired in 2005 as chairman and CEO, however, it was at a time when NCR was struggling. The company had no strategy for growth and sustainable profitability, and any shareholder value was simply being created by unsustainable cost-cutting. At this time, many wondered if NCR would even survive – or if there was any viable future for the company. And perhaps that is what drew me to the NCR opportunity. It goes back to my upbringing in the Bronx. Where I grew up, your viable future was what you could see right in front of you at that moment. And that’s how most people were judging NCR at the time.
What NCR needed was a vision for the future. And just as I created a vision for a better life for myself, I set out to create a vision for a more productive and profitable NCR.
Reinvention begins with an aspirational vision. In 2005, when I would ask employees what our company vision was, very few beyond the management team could tell me. When you set out to create a vision, you must first ask yourself a simple question: Where do you want to go and what makes it so very different from where you are today? At NCR, we knew that simply being the “cash register company” or even the “ATM company” would not be the path toward long-term, sustainable growth in an increasingly digital and mobile world. So we created a bold and aspirational vision: to lead how the world connects, interacts and transacts with business. This was a watershed moment in the company’s history.
That single vision statement transformed NCR. If you walk the halls of NCR today, our employees can share our vision with you. Over the past nine years, I have said that single vision statement so many times to employees, customers, partners and investors; and each time I say it, I realize it’s no longer a vision we are describing – it’s a vision we are living. Today, we enable nearly 500 million transactions every single day, across financial, retail, travel, hospitality, telecom and technology, and small business. Without NCR’s vision, the way you interact and transact with businesses would be very different. NCR’s vision is making your life easier as a consumer, each and every day.
This vision drives our company mission, business goals and business strategy. It has been the guidepost on our journey. And every reinvention journey needs a vision, a guidepost that keeps you focused on the end goal. Because with every reinvention there will be highs and lows, and there will be times when people will think you’re just downright crazy. I call this courageous imagination.
When I told people that we should spin-off Teradata from NCR, people were simply shocked. Teradata, a data-warehousing business that was a part of NCR at the time, was one of its most profitable assets. Why would you want to spin-off one of your most profitable assets, not to mention as a CEO, why would you want to run a smaller company? The problem was that Teradata served a different market and customer than the rest of NCR. And, because it was a very profitable business with high margins, all the investment was going to Teradata, while the rest of NCR was starving, with little support. We made the decision to spin-off Teradata, essentially becoming two separate companies. Today, both companies are thriving independently.
Which brings me to the next key tenet of reinvention – being disruptive is a good thing. You grow up being taught to “raise your hand,” “wait your turn” and “ask for permission.” It’s not often you hear someone tell you that being disruptive is a good thing. I’m here to tell you that it’s a must if you want to execute a successful reinvention.
One of the biggest issues to overcome when you’re looking to progress your company, your culture, your solutions or your processes is the issue of incumbency. When you are so used to doing things in a way that has led to successful outcomes in the past, incumbency can become a dangerous, comfortable place. For example, when you are the incumbent vendor, you begin to get more comfortable with your customer. You often rely on what you know works and you maintain the status quo. You can start to think that you’re in a place where you don’t have to change at a rapid pace, which is often exactly when the competition sneaks in.
You cannot do the same thing the same way over and over again and expect to reach new levels. To reinvent yourself, your company or even a process, you have to disrupt. You have to push yourself to go beyond best practice and reach for the next practice. At NCR, we’re always changing, transforming and evolving. We’re not changing for change’s sake, we’re changing with purpose. One of the key fundamental cultural changes we’ve made is moving away from incremental innovation to more disruptive innovation.
We have an equation – half the cost, twice the quality, four times the customer value. So whatever you built last year, build it for half the cost, twice the quality you built it for, and four times the value to our customers. And this equation doesn’t just apply to our engineers. I want people working on what might be perceived as mundane processes to be disruptive. Some might say the quote-to-cash sales management process is a mundane process. I would tell you that you can be disruptive in thinking about how you handle that process, and I want every employee to feel empowered to think that way.
Now a reinvention does not happen overnight. However, in today’s business environment, speed wins the race. Businesses must move quicker than ever before to stay relevant, compete and survive. Technology is evolving at a rapid pace, and the speed of innovation will only accelerate. What is relevant today will be antiquated next week. That app you just downloaded – well, you can be sure there will be a newer, better version of it tomorrow. Because today, it’s not the big that beats the small – it’s the fast that beats the slow.
When I took the reins at NCR, we were not fast moving, agile or entrepreneurial. We had a culture that forgot how to take risks, a culture that had developed muscle memory on how not to grow. One of the first changes I set out to make at NCR was to address our lack of agility and speed. We installed a management system that was designed to give more timely, useful company performance data to make business and customer decisions more quickly. We set a goal to be first-to-market with products, pricing and quality that is disruptive in nature. We focused on our ability to rapidly convert, manufacture and build a supply chain around these solutions and bring them to market effectively, by geography.
How quickly we are adjusting our playbook for the future is one of the main reasons we have been able to pull away from our historic competitors and define a new category for ourselves called “consumer transaction technologies.” However, the pacing and sequencing of the changes you make are extremely important. You can only do so many things so quickly. The organization can only digest so much. I can move significantly faster than most of the members of our team, but I can also turn around and no one will be behind me.
A reinvention is not a 100-yard, one-mile or five-mile race – it’s a marathon. And like any race or marathon, there are no shortcuts to victory or to greatness. When I became CEO, NCR was already in the process of a turnaround. A tremendous amount of cost was being cut from the company across various areas to meet our quarterly profit goals. The problem with that turnaround formula is that kind of cost cutting is not sustainable if you want to grow over the long term.
That’s the difference between a turnaround and a reinvention. Turnarounds are for short-term gain while a reinvention is done to drive long-term, sustainable growth. A successful reinvention requires the ability to take smart risks and make the right investments. At the height of the Great Recession, we invested in our company and our people. We reinvigorated employee training and development and built a global manufacturing network in five countries, three of which are in emerging markets.
To reinvent, you must create new solutions and transform old ones. You must adopt new processes, structures, models and ways of thinking. And most importantly you must continue to change before you have to. Today, NCR is a trusted, innovative, vibrant and agile enterprise that one analyst called “the top start-up of 2013.” Yes, we are very proud of our 130-year-old tradition, but we’re just getting started!
“Don’t be afraid to take risks, always.” I look back and realize these are words I have lived by my whole life, from roof hopping to deliver newspapers to the dramatic steps we have taken to reinvent NCR.
Whatever role you play in your organization, you have an opportunity to be an innovator and a pioneer in defining your vision for the future. I encourage you to push the limits of what’s possible. And remember, all of us have been blessed with the gift for reinvention – what you do with that gift is up to you.
Thank you once again for this tremendous honor.