We sat down with Harvard Business School’s (HBS) chief digital officer, Katia Walsh, to learn more about her background, her thoughts on digital transformation, her previous role at Levi Strauss, and what excites her about joining HBS and returning to Boston.
Describe your background.
I grew up in communist Bulgaria, the only child of a single mom, independent and self-sufficient from an early age. I became a card-carrying reporter for the National Children's Weekly at the age of nine. Throughout my childhood, I wanted to become a journalist. There was only one journalism program in the entire country, and it accepted just 13 people a year. I took a big risk in applying to only that program but got in and learned a lot.
Journalism is a form of data analysis. You are always gathering information, detecting patterns, and predicting trends. It was a great foundation for what I chose to do next. The Poynter Institute for Media Management sponsored me to come to the US to continue my studies and that’s where I first used a computer, one of the early Macintosh models, and loved it. I went to Indiana University during the heyday of the Internet and focused on researching new communication technologies. I then pursued a doctorate at the University of Missouri, where I fell in love with statistics and specialized in new communication technology and quantitative methodology.
Then, in my professional career, I’ve had the privilege of serving as the first head of analytics at Prudential Financial in New York, the first chief big data and AI officer at Vodafone Group in London, and the first chief strategy and AI officer at the iconic brand of Levi Strauss & Co.
To sum up my background, I have three passions. The first passion is for the power of information. The second is for technology and its power to amplify the power of information. And the third is for machine learning and its power to help us detect patterns, deliver predictions, and drive desired outcomes.
What do you see as the promise of digital transformation?
Let me start with a controversial statement. I do not necessarily believe in the term “digital transformation.” Instead, I hope we can move beyond digital transformation. That is because I believe in helping organizations embrace digital and emerging technology in support of top strategic goals. Digital and emerging technology powers new experiences and enables brands to remain relevant and retain (or gain) a competitive advantage. Technology is always in service of business strategy, with a focus on value creation—never technology for technology's sake.
Can you describe the work that you did at Levi Strauss?
My previous role combined strategy, digital and emerging technology, and artificial intelligence. This role puts in motion the flywheel of digital products, data, and artificial intelligence that fuels a modern business. Digital products generate lots of data, which makes artificial intelligence possible. And artificial intelligence, in turn, makes digital products smarter.
In driving the use of technology in service of iconic brands’ strategy, the focus is on four key areas. The first is customer experience. If the customer does not feel the impact, it's not worth doing. At Levi's, one of the first things we did was to personalize the experience for our customers, whom Levi’s called “fans.” (When people literally have the brand tattooed on their body, they’ve earned that name.) How do you deliver an experience worthy of such devotion? That's the power of digital products, data, and artificial intelligence. We used more data than ever before and applied machine learning to personalize the online experience, target marketing communications, and create exclusive loyalty benefits. We also extended that experience in the physical stores and customized the merchandise to match the specific profile of consumers frequenting the area around every store around the world—that was revolutionary.
The second area of digital impact is driving internal efficiencies. This has three sub-areas: automation, optimization, and current business model transformation.
Automation: Anything that's digitized can become automated. And, in today’s business, anything that can be automated should be automated. I’m not talking about machines replacing meaningful human jobs, but rather taking on repetitive manual tasks and freeing people to focus on strategic work. For example, during the pandemic store closing and re-opening times, some employees had to spend half of their time every week inputting data manually. We automated the work, so it would take minutes instead of days, and enabled employees to concentrate on more impactful efforts such as helping front-line associates serve customers.
Optimization is another way to drive financial benefits. For example, we used machine learning to determine the exact price that a consumer would pay anywhere in the world, through any channel, in any location, in any store. When stores re-opened after Covid, retailers had piles of inventory to move and most of Levi’s competitors resorted to deep discounts. We did not. Our algorithms had shown that consumers would pay full price due to the strength of the brand and pent-up demand. So, we relied on those predictions and, as a result, realized one of the healthiest financial margins in the company’s history—thanks to the use of machine learning.
Transformation of business operations is yet another example of digital technology use for internal efficiencies. In retail, the original data science function is planning—determining what inventory to stock where, in what quantities, how to price it, and how to promote it. We completely transformed merchandise planning and inventory management for Levi’s. We created a live-streaming repository of data—both internal data, such as sales and customer information, and external data, e.g., weather, epidemiological outlook, economic models, social media trends, and consumer mobility. Once we put together data sources that had never “met” before, we discovered patterns we wouldn’t otherwise know. Applying machine learning to that helped us transform the old ways of work into precision planning.
The third area of impact from deploying digital and emerging technology is to enable new business models that were not possible in the past. This can take different forms. One example: digital-only revenue streams that supplement physical products. Another example could be platform business models that use the strength of a brand and enable connectivity and transactions among communities around that brand. And a third new way to create value could be to license software or other intellectual assets that may have been developed for internal purposes and can benefit others in the same or different industries.
The fourth area of digital and emerging technology’s impact is social good. Responsible use of AI is of particular importance that’s growing by the day. Levi’s has a foundation that raises money from employees for employees around the world. We used AI to predict global events that would require donations and matched potential donors with recipients. Another great example of applying digital technology for social good was in my time at Vodafone. We used anonymized and aggregated mobility data to track and prevent the spread of malaria in West Africa. And because we had developed accurate algorithms, the company was later able to help governments in Europe, Africa, and Asia to help track and prevent the spread of Covid.
What excites you most about what these capabilities could bring to Harvard Business School?
The mission of the School is so powerful, and it’s a privilege to be able to deploy digital and emerging technology in service of that mission. I won’t know the specific ways in which we can apply these capabilities until I’ve learned more about the top overall business priorities and opportunities. I can’t wait to speak with alumni, students, faculty, staff, and other constituents, listen, sit in on classes, and form partnerships. This will help us discover where to deploy digital technology in service of strategic priorities, with a focus on measurable value. My motto is: Think big, start small, and scale fast. That will help us deliver value as quickly as possible, while transforming for the long run.
How do you see your first 90 days playing out?
Learn as much as possible and meet people so I can create relationships. When I worked in telecommunications, one of my colleagues used to say that the world runs on networks—the physical ones that connect devices, and the human ones, based on the relationships that you build. Though I love technology, it’s people who are the most important driver of any transformation, including digital. I look forward to creating relationships across the School, the University, and the global community around our legendary brand.
What are you most looking forward to about being back in Boston?
Boston feels like home. Though I hold several passports and consider myself a global citizen, it’s good to have an anchor base and, for me, that’s Boston. My husband grew up here, we got married here, my two children were born here, and we have family here. After years of adventures in New York, London, and San Francisco, it’s great to come home—to Boston and HBS!
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