Michael Schank On How To Use Digital Transformation To Take Your Company To The Next Level

An Interview With Cynthia Corsetti

Business Model Disruption

Digital is bringing unprecedented level of disruption to traditional business models. A business model is the way a company creates, delivers, and captures value.

As part of our series about “How To Use Digital Transformation To Take Your Company To The Next Level”, we had the pleasure of interviewing Michael Schank.

Michael is a distinguished thought leader and executive, specializing in addressing Digital Transformation and Operational Excellence challenges through his innovative, process-based framework. With over 25 years of experience in the Financial Services industry, he has primarily served as a management consultant, empowering clients with forward-thinking solutions in technology, process, and risk and spearheading large-scale business and digital transformations. Michael brings a powerful combination of superior sales and delivery skills, having personally sold and delivered over $100M in consulting services.

He is the author of the forthcoming book, ‘Digital Transformation Success,’ in which he introduces his groundbreaking Process Inventory framework. This promises to be a transformative approach to achieving success in the digital era, unlocking unprecedented levels of operational efficiency and strategic alignment.

Thank you so much for joining us in this interview series. Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

Mycareer started in the Financial Services System Integration practice at Accenture. I began as a Java & C++ programmer, I was a solution architect, and I ran large technology delivery projects for clients. After that I did a short stint at Bank of America as a technical delivery executive. My focus was exclusively on technology, which I appreciate for the foundation of knowledge that it provided me, but I had almost no appreciation for what the business did and how it worked.

Then I joined EY, which at that time did not have a deep technology practice. One of my first projects was to create a capability model, which essentially identified everything the business did in one model, for a large US retail bank. I had an epiphany moment when I was captivated by the transformative power of this comprehensive understanding of business operations for performance management.

I spent the rest of my time there, and later at Citibank, deepening my understanding of this concept and testing it in a wide range of scenarios, such as delivering a transformation, defining strategy, managing risks, and much more! Through this time, I developed the Process Inventory framework which is a single process-based solution that delivers results in virtually all transformation and operational excellence use cases.

I am such a believer in the power of this concept to address the challenges of industry transformation that I have dedicated myself to detailing it in a book and promoting the concept broadly.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?

In the early 2000s, I was working as a development manager for a Mortgage Servicing company and we were deploying their first Loan Servicing website. I don’t think this qualifies as “funny”, it certainly wasn’t so at the time, but when we deployed it to production there was an issue with browser sessions in which a user would log in but see someone else’s loan information. This is a huge customer privacy issue and the site had to be shut down immediately until the issue was addressed.

That left an imprint on me that quality is so important. Being much more thorough in identifying those edge conditions to test would’ve avoided this situation. The importance of quality extends well beyond software development though. If organizations are going to adopt this approach of using a Process Inventory to drive transformation, then rigorous quality standards and processes are a must!

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

This is such a great question and a hard one to answer. I’ve been extremely fortunate to work with an incredible amount of smart and talented colleagues and clients. I feel like it’s important to integrate positive traits from almost anyone you come across.

To be specific, I would like to highlight a client I worked with when I was just starting to explore this concept. He was a true architect who placed great importance on the quality of the models we created to meet the business’s needs. This required adhering to detailed standards, implementing rigorous quality processes, and formalizing approvals. Despite our busy schedules filled with meetings, we occasionally met at 4 a.m. to grab coffee and delve into the details, allowing us to develop a coherent playbook for the team. This experience significantly contributed to advancing my understanding of this craft and taught me how to sustain it for long-term success.

Is there a particular book, podcast, or film that made a significant impact on you? Can you share a story or explain why it resonated with you so much?

There are so many books and podcasts that I’ll instead focus on a topic, which is how humans think, both about ourselves and others. I read the classic “How to Win Friends and Influence People” early in my career which had a profound impact on being conscious and intentional in personal interactions. I’ve read multiple books by Robert Cialdini on the art of persuasion, listened to many podcasts by Joe Dispenza on how to harness our own minds to reach our greater potential, and many others.

At the end of the day, I wrote a book about Digital Transformations, but consulting is a people business. You may have the best ideas or solutions in the world but if you can’t connect with people those solutions will die on the vine.

I have two teenage children; my oldest will be off to college next year. My advice I’ve been giving them is that to be successful in this world you just need to master your craft and become a master of people. With those two skills almost, anything is possible.

Extensive research suggests that “purpose-driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?

I did not start my career with any intention of writing a book or building a business. However, I experienced many dysfunctional transformation programs in which complexity crushed any well-meaning leaders that wanted to transform their organization.

I’m naturally curious and a problem solver, which led me to develop my process-based framework which I believe will transform how transformations happen. I’m so dedicated in my belief that I had to leave the corporate world to get this on paper and educate businesses on this approach. I even wrote the dedication in my book to transformation leaders that go into a transformation with great intentions just to be stifled by complexities and competing agendas, I want to help them with their ambitions!

Are you working on any new, exciting projects now? How do you think that might help people?

Yes, in addition to promoting my book and providing consulting services I’m working on creating an online course which is targeted to giving transformation leaders and their teams the tools necessary to deliver on their transformation commitments. This online training will be paired with group and personal coaching sessions which I believe will be a great way to amplify this message and arm more leaders. This will be the first in a series of training that I will launch, the others include process modeling in this framework, building a successful Process COE, and how to drive value in specific use cases.

Thank you for all that. Let’s now turn to the main focus of our discussion about Digital Transformation. For the benefit of our readers, can you help explain what exactly Digital Transformation means? On a practical level what does it look like to engage in a Digital Transformation?

We are in an era or rapid technology advancements from Artificial Intelligence, automation, Virtual Reality/Augmented Reality, Internet of Things (IoT), and much more which are changing the way we live and work. These advancements are also changing business with new business models, advanced products, enhanced customer engagement models, new ways of operating and the competitive landscape.

This highlights the fact that for most organizations, undergoing a digital transformation is no longer optional. Failure to adapt could result in lost market share or even lead to the demise of the business. A compelling illustration of the need to adapt is the case of Nokia, which held over half of the mobile phone market in 2007. However, with the release of the iPhone that same year, featuring a superior user interface and robust app ecosystem, Nokia struggled to adapt. As a result, their market share plummeted by 90%, leading them to sell their mobile phone business in 2013.

Approximately 89% of organizations are planning to adopt or have already adopted a digital business strategy. Digital Transformations is the process of adopting and implementing digital technologies to processes, products, and assets to improve efficiency, enhance customer value, manage risk, and uncover new monetization opportunities. These programs typically require a multi-year, multi workstream program, demanding substantial and targeted efforts across numerous diverse business and functional teams.

Which companies can most benefit from a Digital Transformation?

Virtually all companies stand to gain from integrating technological advancements into their business models. However, the extent of these benefits depends on various factors such as the competitive landscape, customer expectations, industry innovation, and the need for operational efficiency.

For instance, healthcare organizations can improve patient care through the implementation of electronic health records and telemedicine. Manufacturing companies can enhance efficiency and optimize their supply chains by leveraging Smart Factories, which utilize IoT and machine learning technologies. Similarly, retailers can elevate customer experiences by employing advanced data analytics for personalized interactions.

We’d love to hear about your experiences helping others with Digital Transformation. In your experience, how has Digital Transformation helped improve operations, processes and customer experiences? We’d love to hear some stories if possible.

Absolutely, here are three which highlight the power of focusing transformation on process.

Life and Annuity Company

I led a large transformation for this organization where we took a business-centric approach, leveraging processes, to deliver a successful transformation. This US Life and Annuity business was being spun off from a large global insurance company. Their vision was to be a low-cost insurance provider; they didn’t want to inherit legacy systems, which meant new platforms built almost exclusively on the cloud. To define their transformation strategy, we adopted a ‘City Plan’ approach, wherein we documented each of their business areas, processes, and outlined the high-level requirements for those processes aligned with their future vision. This provided the platform to prioritize investments, select vendor partners, and coordinate all aspects of implementing their future as a new company. This approach delivered a much simpler operating environment which has enabled them to be agile and low cost!


Two regional banks of approximately equal size had announced a merger and had set up a post-merger integration program to reach Client Day One, the day when the combined company operates as a single entity and serves its customer base under the new brand.

As part of their program, they recognized that future state process design was critical to a successful transition. I led the team that developed the request for proposal (RFP) response and ultimately in delivering the work. Our scope was to create future state designs for eight business units. Prior to our onboarding, the bank had already made decisions on the platforms and personnel they would leverage in their future state processes. Our engagement began with creating process inventories for each business unit and then process maps for high-priority processes.

This turned out to be a valuable input, providing clarity on the integration impacts and enabling better requirements for the system, personnel changes, and risk management. This enabled them to deliver on their integration commitments while driving efficiency into their operations.

Risk Management at a Global Financial Institution

This institution has faced several regulatory findings related to weaknesses in their operational and compliance control environment throughout their enterprise. In response, they have embarked on a multiyear program to address these concerns, with a focus on establishing a robust risk framework.

Given this context, I was brought on to lead the Process-Excellence team for the US Personal Bank. I worked closely with the business unit leaders and their staff to create a comprehensive Process Inventory.

During our engagement, we mapped data from their risk repository to the Process Inventory in key business units. This exercise provided concrete and detailed business context to the risk data, enabling identification of opportunities to address risk data quality issues and improve overall risk management practices and accountability.

Has integrating Digital Transformation been a challenging process for some companies? What are the challenges? How do you help resolve them?

Yes! Shockingly about 70% of these programs fail to reach their goals and the global spend for these programs is expected to exceed $3.4T which means the implications for failure are massive.

The root cause of failure can be attributed to organizational complexity. Organizations undergoing transformations often operate diverse business lines across various markets, manage aging and complex IT environments, and navigate significant regulatory oversight. Successfully delivering these transformations typically require a multi-year, multi workstream program, demanding substantial and targeted efforts across numerous diverse business and functional teams that must collaborate effectively.

Each of these teams have their own unique language and perspective which hinders communication and collaboration. Successfully navigating on such an ambitious program requires a transformation leader with superhuman capabilities to keep everyone focused on the transformational goals.

To date, no holistic framework or methodology has been created to solve this complex and important problem.

The Process Inventory Framework solves this by creating a common language of business processes by inventorying every process the organization performs. This inventory when combined with existing operational data such as applications, products, risks, etc. becomes a powerful Operational Intelligence repository which shows how everything is connected to foster stronger collaboration and alignment to transformational goals.

The Process Inventory framework solves virtually all transformational challenges such as envisioning a digital future through a business lens and efficiently driving changes to completion, driving operational excellence by eliminating inefficiencies and waste to become more agile in the face of future uncertainty, creating a more flexible enterprise architecture that is aligned to the needs of the business, and finally significantly improving risk management capabilities so an organization can be confident that they are safeguarding themselves, their customers, and the markets they serve.

In my book and my consulting services I detail this framework, how to build the process capability for sustained success and how to deliver on an organization’s transformational aspirations.

Based on your experience and success, what are “Five Ways a Company Can Use Digital Transformation To Take It To The Next Level”?

The rapidly evolving technology landscape is disrupting the competitive environment, which means that for most, undergoing a digital transformation is no longer optional. Organizations that thrive in this era will be the ones that embrace these technologies and are willing to cannibalize past success to find new models to deliver value and drive competitive differentiation. Below are ways that companies are leveraging digital technologies to take their business to the next level.

Business Model Disruption

Digital is bringing unprecedented level of disruption to traditional business models. A business model is the way a company creates, delivers, and captures value.

One of the most disruptive examples of this was the dot-com boom that started in the mid-1990s marked the beginning of the ecommerce business model, which is defined as enabling customers to buy and sell goods and services over the Internet. This business model, which has challenged traditional brick-and-mortar businesses, has evolved with the maturation of smartphones, tablets, and other Internet-connected devices and apps. This area has become increasingly competitive as ecommerce is projected to account for 20.4% of global retail sales by the end of 2022, up from only 10% five years earlier. A recent trend is the growth of Direct to Customer where brand establish direct channels to their customers. A couple successful examples of this is Warby Parker for eyewear and Dollar Shave Club for shaving products, both of which have effectively bypassed traditional retailers to engage directly with their customers.

The model that may have had the most success in this era is the platform business model, in which a company creates a platform that connects multiple groups of users. These models allow enterprises to set up powerful ecosystems for value exchange and innovation among participants. Some of the largest and most successful companies by market capitalization in this era, such as Apple, Microsoft, Amazon, Alphabet (Google), Facebook, Uber, Airbnb, and Alibaba, are either based on or prominently integrate this model.

There are many other examples. As part of defining the digital strategy an organization should explore how technology advances can drive new ways to capture value.

Focus on the Customer

In the digital era, where customers wield unprecedented control over their choices, the implications are clear for organizations embarking on a digital transformation journey. If the experiences customers demand in their products and services aren’t delivered, they can easily vote with their feet. Success in this transformative journey lies not in a technology-centric mindset but in one that places customers at the center to reimagine engagement and experiences to align more closely with what customers seek. Statistics demonstrate the success of this customer-centric approach, with 84% of organizations focusing on improving customer experiences reporting increased revenue, and a staggering 79% attesting to significant cost savings.

This focus demands an approach which views the business from the outside-in — that is, from the customer’s point of view — to redefine customer experiences, relationships, and processes. A standard method for doing this is creating customer personas, which detail a customer’s perspective. Clothing retailer Lululemon underscores the success of this approach. Founder Chip Wilson anchored the company’s strategy on a persona he named Ocean. Ocean was a 32-year-old professional woman who makes $100,000 a year, is engaged, owns a condo, travels, is fashionable, and works out an hour and a half a day. The organization studied Ocean, who served as the inspiration for their merchandise design which established them as pioneers in the emerging fashion category known as athleisure.

To be successful, organizations must adopt a companywide culture of customer centricity and build and maintain data about their customer preferences. This will enable new experiences and engagement models which will deepen loyalty and brand reputation which will drive new value.

Data as an Asset

We are experiencing an unprecedented surge in data volume, with a growth rate of almost 5,000% from the decade ending in 2020, fueled by social media, online transactions, IoT devices, and technology enhancements. Simultaneously, stringent data regulations like GDPR, CCPA, and HIPAA have heightened the importance of data management and governance for organizations.

Recognizing data as a competitive asset, businesses are striving to effectively manage and leverage it to gain valuable insights, enhance decision-making, and drive innovation in products, processes, and business models. The integration of AI capabilities further emphasizes the need for robust data analytic capabilities, facilitating empirical decision-making over gut feeling.

Walmart exemplifies this trend with its data-driven approach, utilizing AI and machine learning to optimize its supply chain and customer experiences. Moreover, organizations are realizing the potential to monetize their data, as seen in Mastercard’s Data & Services unit, leveraging transaction data to offer valuable insights and analytics solutions to clients.

Defining a digital strategy centered around data requires top-level commitment, often led by a Chief Data Officer tasked with creating a comprehensive data strategy aligned with business objectives. This strategy encompasses data governance, privacy policies, cultural alignment, data architecture, and analytics capabilities, essential for enabling data-driven decision-making and maximizing the value of data assets.

Operational Excellence

Digital Transformations can’t be viewed as an end point as it’s difficult to predict how advancements in technology and other external forces will shape the business landscape in the short and long term so they must be viewed as continuous journeys. The key is achieving organizational agility, which is the ability to quickly reconfigure strategy, structure, processes, people, and technology toward value-creating and value-protecting opportunities!

Many incumbent organizations suffer from the inefficiencies of their size as they can be characterized by large administrative bureaucracies, complex and fragile IT infrastructure, massive data environments, extensive vendor relationships, and stringent regulatory oversight. Some of this may be unavoidable as a factor of size while much of this complexity is due to past decisions where business need expediency prevented optimal design which have created organizational silos, redundant systems, and other complications that hinder change as it becomes time-consuming and expensive, or worse, encounter resistance as teams undermine efforts to protect their turf. This is analogous to a large ship trying to turn around in a narrow river, the size and complexity prevents nimbleness.

To drive greater agility, organizations need to drive Operational Excellence programs. Operational Excellence is focused on efficient utilization of resources and elimination of waste in how the organization operates. This goes beyond optimizing individual or core processes but aggressively scrutinizing all resources to identify their contribution to the organizations mission.

These programs are typically rooted in the principles of Lean Six Sigma, which were influenced by the Toyota Way. Post-World War II, Toyota had a significant disadvantage to larger car companies due to its limited size and scale. Their only way to compete was to build a culture of waste elimination and quick cash turnover. This led to amazing results as Toyota’s net profits outshone competitors by a staggering margin; they were the world’s first automobile manufacturer to produce more than ten million vehicles per year, a record set in 2012, underscoring the potency of their philosophy.

Focus on Empowering Employees

Artificial Intelligence and automation will continue to disrupt the workforce replacing humans in mundane and repetitive tasks, pushing the workforce toward higher cognitive activities which require critical thinking.

Successful organizations will view this as an opportunity to build a high-performance workforce to drive innovations in products, processes, customer experiences, and more. To deliver a high level of engagement, it’s important to focus on what motivates people: challenging work, achievement, recognition, and opportunities.

To fulfill these motivating factors, it’s essential to precisely define accountability and ownership — not just for the transformation but also for the long-term operating model. Adopting a comprehensive Process Owner model, where all processes are clearly defined and points of collaboration with other areas are detailed, is essential.

On one project I was brought in to help, a mortgage industry client was outsourcing several critical business functions to a third-party provider as a strategy following the 2008 financial crisis. They had a very sizable requirements team on the ground that was in deep trouble, reporting red on most measures due to the absence of a coherent structure.

I led a small team that interviewed the business to identify every process along with its process owners, and created process maps detailing how they were executed. This clarification of ownership and detailed process transparency resulted in complete and high-quality requirements being delivered per the revised timeline. This put the program on solid footing as they executed the outsourcing.

By defining ownership, eliminating hierarchical barriers, rewarding initiative, valuing openness, and providing tools, leadership empowers every employee to be innovation engines.

In your opinion, how can companies best create a “culture of innovation” in order to create new competitive advantages?

The rapid evolution of the digital landscape underscores the necessity of a culture of innovation for long term sustainable success. A recent study found that digitally innovative organizations grew their revenue more than twice as fast as those that haven’t built this capability.

The traditional model of innovation relied on a top-down hierarchy or dedicated research and development (R&D) departments. This approach worked well for many decades, but in the digital era, it is severely limited. It excludes the wealth of expertise distributed throughout the organization that can’t contribute because they are constrained by their leadership, hindered by organizational silos, or lack tools and access to information.

This shift has given rise to two new models: Open Innovation and Democratized Innovation.

Open innovation is the practice where organizations utilize multiple external sources, such as customers, partners, and the public at large, to drive new ideas. LEGO is a great example with their LEGO Ideas platform, allowing fans to upload product ideas, and if an idea received 10,000 votes, LEGO would review it for possible production. This approach not only led to the creation of products that resonated with their customers but also helped build a community of loyal enthusiasts.

Democratized innovation is expanding ideas and innovation internally. This requires building a culture where employees are encouraged to pursue their creativity, connect dots, and create novel solutions that generate business value. This starts with a philosophy and tone that removes hierarchical barriers, values openness and experimentation, and rewards initiative. This also means providing training, breaking down organizational silos through cross-functional teams, and giving people access to resources, tools, and data for them to understand the big picture. 3M, an innovation powerhouse, has succeeded in this approach by implementing the 15% rule, which encourages employees to dedicate that portion of their time to innovation. This approach has led to the development of several successful products, such as the Post-it Notes and Scotchgard.

A critical enabler to success for operational improvements, especially in the democratized innovation model, is to create a holistic Operational Intelligence repository which provides details on how the organization operates by detailing processes, products, resources, ownership, and much more and making it transparent and available to everyone and anyone to refine their ideas.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“The people who are crazy enough to think they can change the world are the ones who do.” — Steve Jobs

I took a huge leap from the corporate world to write this book and start my company because I believe in the power of this framework to address the high failure rate of transformations. It’s a massively audacious goal given the scale and scope of this problem, but I guess I’m crazy enough to follow this string to see if I’m right.

How can our readers further follow your work?

There are three ways to follow me:

  • Buy the book at Amazon or wherever you buy your books online to understand the details of my framework.
  • Follow me on LinkedIn, at Michael Schank. I post a lot of content on my framework and the use cases for transformations.
  • Check out my website at ProcessInventory.com, where I detail the services I provide, the training I offer, and additional content.

Thank you so much for sharing these important insights. We wish you continued success and good health!

About the Interviewer: Cynthia Corsetti is an esteemed executive coach with over two decades in corporate leadership and 11 years in executive coaching. Author of the upcoming book, “Dark Drivers,” she guides high-performing professionals and Fortune 500 firms to recognize and manage underlying influences affecting their leadership. Beyond individual coaching, Cynthia offers a 6-month executive transition program and partners with organizations to nurture the next wave of leadership excellence.