EY’s Anthony Caterino On How To Use Digital Transformation To Take Your Company To The Next Level

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

A trusted leader with nearly 30 years of experience in professional services, Anthony is EY Americas Deputy Managing Partner and Senior Vice Chair. In this role, he oversees strategy execution and operations for the EY Americas geographic area, which represents more than 80,000 professionals in member firms in 31 countries. He also is a member of the US Executive Board and the Americas Executive Board.

He works closely with some of the EY organization’s largest clients to help solve their most pressing business challenges.

Since joining the EY organization as an intern in 1991, Anthony has held a number of client-serving leadership roles, including EY Americas Financial Services Organization (FSO) Regional Managing Partner and Ernst & Young LLP FSO Southeast Market Segment Leader.

Anthony holds an MBA from Columbia Business School and a BS in Accounting from Babson College.

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?

I grew up in Long island then went to Babson College in Boston to study accounting where I especially enjoyed their focus on entrepreneurial studies. After graduating, I joined EY in 1991 and got started on a traditional accounting career based in New York. Then in 1996, I was one of 16 people who originated the firm’s nascent advisory services business, with the objective of building an operational risk practice in the US. It meant I was working a great deal with banks in the southeast, flying to Charlotte regularly in an effort to build those relationships.

It was a tough market to enter because a number of our competitors already had established offices there. It therefore seemed to me that to successfully compete, EY needed to be part of the local community. That led me to build a business case and propose that we expand the Financial Services Organization (FSO) into Charlotte to serve clients based in the southeast region. My boss gave it the greenlight, leadership endorsed the strategy, and we rallied together to make it happen.

As a family, we relocated to Charlotte and my role changed from one focused on delivering operational risk services to one focused more broadly on building relationships with big financial services companies in the southeast, building our brand and securing engagements across an array of services.

I was asked to lead our Southeast Financial Services Market Segment in 2014 before becoming Regional Managing Partner for the Americas FSO a year later. Then last year, I took on the role of Deputy Managing Partner for EY Americas. It’s been an incredible 30 years, and each new opportunity builds on the experiences and relationships that I’ve gained along the way.

When I look back on my career and who I am today, I believe that the 9/11 terrorist attacks were a defining moment for me — both professionally and personally. Obviously, it was an horrific day for our whole country and my hometown, Garden City, had a lot of folks who worked in the World Trade Center and ultimately lost their life there. That included people from my school, my old boy scout leader as well as a number of family friends. It was a day I took very personally, which is why I was so proud and inspired to be part of EY’s response in helping our clients and the whole US financial sector with disaster recovery in the weeks and months afterwards. It’s where I became so passionate about purpose and what became EY’s commitment to building a better working world.

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

An entrepreneurial mindset comes with a lot of trial and error, so I’m fortunate EY has given me leeway over the years to make mistakes and learn from them.

One mistake that makes me chuckle was from the early 1990s when I was working with a client that owned radio, tv and muzak stations. My job was to go around and audit its franchises. One of them was in Wheeling, West Virginia, and I was scheduled to go there in late November. I flew from New York, where I was living, to Pittsburgh and then rented a car and drove to Wheeling. The entire time I’m traveling, it’s getting colder until eventually it starts snowing. By the time I get to the client, there’s a foot of snow of the ground, the temperature’s dropped 30 degrees from when my trip began and the wind is howling.

But being from Long Island, where it never snows at that time of year, I didn’t pack a coat. So, I’ve got no choice but to head to the first store I see and buy one. At this point, I’m still early in my career so a brand new winter coat is not in my budget! But it was either that or freeze and give the client a reason to question my judgment.

I prided myself on being ready for the audit, but that experience taught me to be prepared for the destination, too. From then on, I’ve done my research about where I’m going and thankfully haven’t had to buy any more clothing on the fly! It’s a funny lesson, but it really did teach me to plan ahead, not make assumptions and be prepared for anything that life may throw your way.

None of us is 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?

I would have to say two: my EY colleagues Ed Pisani and Mike Onak, both of whom were instrumental in helping me develop the business case to expand EY FSO in Charlotte, North Carolina. It was a pivotal moment in my career and was also a big decision for the firm too. Without Ed and Mike’s advice, encouragement and support, it may not have happened.

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?

The film Miracle immediately springs to mind. It’s about the US men’s ice hockey team that won the gold medal in the 1980 Winter Olympics and Kurt Russell plays the head coach, Herb Brooks. No-one expected the team to beat the Soviet Union, but Brooks came in and made fundamental changes to its strategy and practice schedule. He basically turned a bunch of talented individuals into a cohesive and high-performing team. I’ve always found that very inspiring when it comes to how I build and manage successful, diverse teams at EY.

Extensive research suggests that “purpose driven businesses” are more successful in many areas. Can you describe your organization’s vision and purpose?

Purpose keeps you grounded when you’re faced with difficult, complex decisions, especially during periods like the one we’re living through now. It also serves as a beacon, attracting colleagues, clients and business partners who share your vision and help you progress. But it isn’t a soft, inspirational exercise. In this time of uncertainty, an organization’s purpose should inform its strategic decision-making and keep it focused on the core values that have guided it through other periods of change and disruption. The business results are — and must always be — real.

EY’s purpose is to help build a better working world and I think of it as our ‘why’. It’s what we can all rally around as colleagues and what defines our culture. It informs our talent strategy, helping us hire and retain people who will thrive in our environment and enjoy a fulfilling career here. And, of course, it makes us stand out from the competition. Clients want us to be great at what we do but they also want us to be great in how we do it. Having a clear purpose helps strengthen our relationships with companies and individuals who share our values.

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

I’ve recently become executive sponsor of the EY Veterans Network, which is something I feel very passionately about. Veterans and their families have sacrificed a great deal for our country and others, so it’s a privilege and honor to work alongside so many at EY. We now have more than 1,100 members across 79 offices, all of whom bring tremendous value to our teams, clients, and communities through purpose-driven leadership. I’m excited to continue to grow the Veterans Network by attracting and retaining military service members and their partners within the company. I also want to ensure, that for those who join us, it provides a place to connect and share experiences, smoothing their transition from military service to working at EY.

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 Digital Transformation?

At its core, digital transformation is about reinventing your business model to create new value for the organization. Of course, technologies like cloud computing, AI and especially data analytics are the driving force behind it. But to look at digital transformation solely from the point of view of the technology itself is a mistake — one that lots of businesses still make.

The key is to focus on what the technology lets you do. How it’s helping you better understand your customers’ evolving needs, innovate new products and get them to market more quickly, drive efficiencies and make smarter decisions. It’s the process of changing a business model not because of new technologies but because of new expectations.

Which companies can most benefit from Digital Transformation?

COVID-19 has caused businesses across industries to radically accelerate their digital transformation — both to keep people safe and in many cases, simply to keep the lights on. But that’s the point: the primary benefits of digital transformation aren’t limited to specific companies or industries. The organizations that reap the greatest rewards will be the ones who continue to embrace the spirit of making it work despite formidable challenges. This means in any process of transformation, you have to expect a mix of extreme success and some failure. But a lot of firms still get very fearful about that, which holds them back. If you’re not failing, you’re not pushing hard enough. And that means creating a culture that promotes innovation and learning rather than simply overhauling your technology infrastructure.

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.

One of the best things about working at a global business like EY is the range of organizations we get to work with. Take, for example, our long-running relationship with a large global bank. It’s been rewarding for our teams to work alongside each other to craft cutting-edge technology solutions that push the envelope of customer experience and operational excellence. Over the past four years, we’ve transformed their digital Open Banking product strategy into an industry leading position. For customers, this means exceptional service through a suite of digital tools that allow them to more seamlessly and securely access their financial data. This enables customers to conveniently and safely use 3rd and 4th party apps in their day-to-day life without having to leverage traditional screen-scraping login methods. Based on this success with their Open Banking digital transformation strategy and product development, we’re looking at new areas of the business to provide even greater value to our client and their customers, not only in Open Banking services but also across the Consumer Digital organization.

This focus on reusable, digitally enabled solutions has helped develop a lasting relationship with our client, delivered continuously growing value to the bank’s customers by integrating their information seamlessly into their existing digital environment, and integrated traditionally siloed areas of the bank into a cross-functional product with customer experience at its heart.

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

When transforming digitally, every company should expect some failure. It’s a necessary byproduct of innovation. Most organizations do a pretty good job of changing their technical architecture but where the biggest challenges arise is when they either don’t back that up with the necessary cultural shift or when they forget about their legacy products and systems.

A good way to think about it is like a human body. If you need a heart transplant, the hospital focuses on making sure your new organ is in good working order. But invariably if the operation doesn’t succeed, it’s because the body has rejected it. If you think about new technologies as the heart, you need to spend a lot of time ensuring the conditions are perfect for them to be integrated into the organization’s ‘body’ at scale.

A big part of that is investing in reskilling and managing your people so they can thrive in a digital — and increasingly remote — workplace. But likewise, you have to ensure any new areas of digitally enabled businesses co-exist with current ones on a single digitized platform. Otherwise, you have new products or services where the cost base is much lower and growth has an exponential impact on profitability. But unless you take the time to evolve and modernize your existing business too, the cost base there keeps increasing as you scale up, limiting the combined impact on the bottom line.

OK, thank you. Here is the primary question of our discussion. Based on your experience and success, what are “Five Ways a Company Can Use Digital Transformation To Take It To The Next Level”? Please share a story or an example for each.

Shift to a deep-rooted innovation culture. The most successful organizations will be those where everyone at every level is empowered to use data and technologies to create products that satisfy new needs.

Establish a disciplined and repeatable end-to-end process for getting new products to market quickly and at scale. A lot of companies tend to do a tremendous amount of design up front, sweat the equity, and then bring out something that’s a flop, meaning all that money and time is wasted. An innovative process is one that includes a continuous and rigorous system of testing and iteration to get it right, including after launch. The most successful innovators, like Big Tech companies, are also the most disciplined.

Wrap everything in value creation. That’s what ultimately delivers competitive advantage. Each step along a digital transformation journey should be viewed through the lens of how it will open up new value streams. Of course, that can happen in various ways but, often, it means creating more seamless, personalized experiences for customers to build loyalty and grow revenue — whether that’s through sharper data insights or better products.

Think outside and in. Value creation isn’t just about your customers. It also means being able to meet people’s evolving expectations around flexible and remote working practices, sustainability, social responsibility and shared purpose, like EY’s own commitment to build a better working world. That’s what lets you attract, retain and develop top talent who change the way you do business for the better.

Re-evaluate your ecosystem. Progressive organizations are realizing that a closed ecosystem isn’t fit for purpose in a post-pandemic world. Of course, that doesn’t mean that opening everything up because that creates a lack of competitive advantage. But it does mean being smart and bold enough to look at how you can work with companies you may traditionally have thought of as competitors to deliver better customer experiences and ultimately create value across the whole ecosystem. For example, banks are slightly ahead of the game here, having partnered with Big Tech companies on transaction platforms. Their challenge now is to make sure those partnerships keep centering around the elements of the relationship that grow their business.

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

The most important thing is to think of innovation as a pervasive mindset not a label. You don’t simply wake up one day and say, “I’m going to create an innovative culture.” Rather, it’s about giving people at all levels of the organization the skills and confidence to experiment, fail fast and learn — then back it with up a strict process of testing and development to drive commercialization at scale. If you look at truly innovative workplaces, innovation is totally embedded in the entire organization’s DNA.

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

It’s actually a lyric from a Steve Winwood song, which goes “While you see a chance, take it”. All through my life, and especially in my career, I’ve believed that opportunities are ours to create and seize. My decision to move from New York to Charlotte, North Carolina to expand the FSO is a good example. It was a bit of a risk professionally and personally; the firm had only formed the FSO two years earlier and our family had no connections to Charlotte. But it’s truly paid off, leading to some fantastic life experiences and acting as a great springboard for other roles I’ve been able to take on at EY since. As Steve would say: I saw a chance and took it — and I’m so glad I did.

This was very meaningful, thank you so much! We wish you continued success!