Chapter 2: Transforming While Performing

With a green light to build the platform, Bay and Sahoo faced a tight timeline for a series of highly complex engineering problems, beginning with cleaning and harnessing Ingram Micro’s data and writing millions of lines of code to power the platform’s AI-enabled engines. It was a project big enough to command the full effort of the company’s leadership, but Bay and Sahoo didn’t have the option of shutting down other operations while Xvantage came to life. Instead, they had to focus on what they called “transforming while performing”—changing the company’s DNA without pausing any of its current activities. To accomplish that, the Ingram Micro team would need to pull off the tricky feat of bringing in the right outside talent while simultaneously reshaping the existing organization from within. 

Sahoo knew he would need to augment Ingram Micro’s talent pool with engineers who had experience working both with this kind of architecture as well as the accelerated, startup-style pace that the project demanded. His first hire was Mukund Gopalan, a chief data officer who had worked at Instagram (a subsidiary of Meta) and Priceline. Next came a product leader and a technology leader, as well as outside consultants (including India’s Tata Consultancy Services). This marked a dramatic shift from Ingram Micro’s traditional strategy of relying on internal promotions. As Scott Sherman recalled: “When we started, from a technology standpoint, we had nobody. If you look at what happened when we went through the half-a-year where we invested in bringing in the talent, we went from about 77 percent of our executives being internal candidates to 53 percent.”

Executive Composition

Outside hires were necessary not just because of the specific skills they brought, but also for their experience working on transformational change in fast-paced environments—a new and uncomfortable prospect for some long-term Ingram Micro employees. “We knew that the technology was not actually going to be the biggest challenge in those early days. It's all around mindset and mind shift and leaning into the transformation,” Bay recalled. As Anaya added, “The true recipe for success of the journey was in the existing team and new talent coming together to drive this change.”

Changing Mindset

Xvantage would never succeed without the full support of Ingram Micro’s team members, many of whom had been with the company for years—and in some cases, decades. To get their buy-in, Bay and Sahoo came up with a multi-pronged plan that began with identifying key internal “influencers”—a term they used for team members who had the highest degrees of experience, credibility, and social capital.

Anticipating the change that would be required, Bay chose four key veterans: Sabine Howest, who was then SVP of global vendor engagement; Jim Annes, VP business operations and transformation; Sandy May, VP of business operations; and Jennifer Anaya, SVP of global marketing. When Bay asked them to back Sahoo and devote their energy to building Xvantage, it was a significant risk for him—given that all four were critical to Ingram Micro’s day-to-day operations—as well as for the “influencers” in question, who were joining a team with a far-from-certain future. “I had people calling me and saying, ‘What are you doing? You're hitching your cart to this thing that is not going to go,’” recalled Howest, who was also surprised by Sahoo’s breakneck working style. “The change was so drastic. If you didn't accept a degree of chaos, or you were resistant to the deadlines, or you were thinking that medium was good enough—it just would not fly.

Even with the influencers in place, there was still significant internal resistance to the Xvantage project. As Bay later recalled, “I heard hallway rumblings: ‘We've already tried all this stuff! This industry is not ready for it.’” Realizing that he needed to quash those doubts once and for all, Bay made his position crystal clear during one of his monthly team addresses (affectionately known as ‘Paulcasts’). “I stood up on stage and said, ‘We don't have a plan B. I'm committed to this as CEO, and it's number one priority for me. So people had to decide: They were going to get in or not.”

Creating DigiOps

Of course, no amount of buy-in would matter if Xvantage didn’t add value to the company—and soon. Sahoo was aware of a common pitfall in digital transformation that occurs when a business commits to developing new technology without adequately tracking the return on investment. “More than 80 percent of digital transformations fail because you build technology and wait for somebody to adopt it,” he recalled. In order to succeed, Sahoo decided he would need to create a new team—dubbed DigiOps—that would act as P&L leaders who would be responsible for monitoring Xvantage’s return on investment.

Howest became the team’s leader, bringing significant institutional knowledge and political capital to the fledgling group. She recalled,

DigiOps was the bridge that you had to make between how the legacy business was organized today and how it needed to be once we digitally transformed it. And so I was the voice of business, so to speak, in his technical group. DigiOps connects processes and systems of the old former world into new business outcomes of this new operating model. The job is a group of change agents inside the organization that drive forward a different way of interacting with our customers, instead of doing simple transactions towards them.