Leading transformation at BAT: Creating an environment that fosters innovation

Marina Bellini, director of digital and information at BAT, outlines the critical role digital technology — and a diverse employee base — is playing at the £26 billion ($35bn) company as it continues to evolve its business model beyond traditional cigarettes to potentially reduced-risk alternatives such as vapour and tobacco heating products.

DIGITAL TRANSFORMATION AGENDA
Q: Can you outline the role digital transformation is continuing to play in driving BAT’s evolving business model and transition to new products and customer engagement?

 

We are in the most dynamic period of change in our 118-year history. In March 2020, we unveiled an evolved strategy with a bold new purpose of building ‘A Better Tomorrow’ by reducing the health impact of our business. We’re doing this by offering a wide range of enjoyable and less risky alternatives to cigarettes. We are harnessing new technologies and the latest science to evolve our product portfolio, and we have set ourselves a target of having 50 million users of our non-combustible products by 2030.

Digital plays a key role in our transformation journey. We are driving an increased data-centric focus alongside automating processes around the BAT Group and leveraging new digital channels. Our data-driven decisions and a test-and-learn approach allows us to work faster and smarter with stronger, better and differentiated insights and foresights. Ultimately this frees up resources and time, helping us to accelerate our results and adapt at pace.
IT EVOLUTION
Q: How is the IT infrastructure changing to support that?

A fundamental shift in our approach was resetting the Group IT function to become the Group’s Information & Digital Technology (IDT) function. Our IDT function now drives the digital elements of our transformation journey to unlock commercial value. IDT has evolved from a support function to a business enabler and today, is central to how we are delivering our strategy, our purpose to reduce the health impact of our business, making BAT simpler, stronger and faster.

Our IDT colleagues are integrated across our entire business, working in partnership with all our functions and business units to build capabilities and drive value. We have skilled resources in our markets supported by four tech hubs in Poland, Malaysia, Mexico and the US. We have also established innovation labs in San Francisco, London and Tel Aviv to further develop exciting external partnerships that can accelerate our journey to build A Better Tomorrow.

Our IT infrastructure has expanded from the back-office to the front-office; from traditional software to platforms that are used at speed and smart scale across the Group; from on-premise to cloud; from ‘one-size-fits-all’ to ‘fit-for-purpose’ solutions; from centralized or decentralized to integrated; from command-and-control to empowered markets and functions; all of which, of course, without compromising on compliance nor cyber security.

 

BAT global headquarters, London

NEW DIGITAL MINDSET
Q: How important is it for the wider business to embrace a digital mindset?

It is essential that we operate with a ‘digital first’ mindset. We are embedding digital at all levels throughout the business with our Digital DNA program — upskilling our people in capabilities that include Agile ways of working, Design Thinking, Storytelling, Exponential Technologies and Data Science. Through this approach, we’re building a workforce that can apply these skills to what we do and to unlock commercial value for BAT. To date, we have provided more than 11,000 hours of Digital DNA training. We have also conducted virtual digital immersion programs for 70% of our senior leadership around the globe.
ENABLING TECHNOLOGIES
Q: What technologies are driving these new opportunities?

Big data and analytics are central to how we manage technology in the Group. We continuously challenge ourselves to harness automation, insights and foresights to drive sharper and differentiated decision-making capabilities by our people across our business, from consumers and customers to our employees, and across our supply chain and external stakeholder processes.

Recently, we invested in demand-forecasting technology that harnesses big data to more accurately predict consumer demand for our products. Following a successful pilot, we are now rolling this out to our key markets.

 

BAT’s ambition: To have 50 million consumers of its non-combustible products by 2030

Obviously digital marketing channels are also key to deliver value to the Group, as we look to better understand and support consumers in their journey of switching from combustibles to new categories of potentially reduced risk products. Cloud and connectivity help to create an omnichannel view for consumers, offering them a unified and seamless experience, and providing us with ongoing learning as we continuously develop and refine our approach and processes.
HIGH-IMPACT INNOVATION
Q: What are the most exciting initiatives you have underway?

There are many, but three of our most exciting transformational projects are:

1  Empowering every function and every market in the organization through data, information, insights and foresights  Through doing so, this work is demystifying the idea that it is too complicated and too costly to put different data sources together to be able to automate processes and draw conclusions, make predictions and test scenarios. As a result, our people are becoming much better informed, in an Agile and empowered way, to navigate this changing environment and accelerate the delivery of our A Better Tomorrow purpose.

2  Transforming our ecommerce capabilities in light of the huge shift in consumer purchasing habits towards online retail  We responded rapidly to the new environment and, leveraging our strong digital capacity, we successfully pivoted our consumer activations for our New Category products into the digital environment. As a result, we have doubled ecommerce revenues and have grown New Category subscriptions by 450% since January 2020.

3  Implemented innovative tools to support uninterrupted recruitment during Covid-19  As we continue to work remotely, we have rolled out new and innovative digital recruitment tools to enable our teams to continue attracting the leaders of the future. In 2020, we supported the remote onboarding of more than 2,600 new joiners around the Group.

 

BAT: Using science and innovation to evolve its product portfolio

THE IMPORTANCE OF DIVERSITY IN TECH
Q: Why is diversity so critical to the execution of technology and, ultimately, business strategy?

Diversity and inclusion matter, not only because they are the right thing to do, but because they make commercial sense. Diversity and inclusion foster collaboration and creativity, and empathy and understanding between your people. That also enables businesses to innovate and transform themselves, which, during the current climate, is of critical importance.

Diversity has long been at the core of our company and our culture. From our inception in 1902, we have grown into one of the world’s most international companies, present in more than 180 countries around the world. In our global headquarters alone, we have 87 different nationalities.

Our diversity — in backgrounds, perspectives and cultures — reflects the outside world and enables a deeper understanding of our consumers. It is the scale and strength of our diversity that underpins the transformation of our company and our portfolio as we build ‘A Better Tomorrow’ and reduce the health impact of our business.

 

I love that people disagree with me, that thoughts get enhanced and ideas are made better by great minds that don’t think alike — and that when we get together, we have the freedom to dissent and add and conclude a way forward. This only happens when you have a diverse, but more importantly, an inclusive environment. This is especially important for technology as we continue in our learning journey, where we need to act fast, transparently understand results, adapt and get better. We are not building technology in a three-year program, which is planned and delivered to perfection (and slow), but through many small- and medium-sized deliveries that need to be made by, and with, people who truly understand our objectives and jointly collaborate to get it achieved.

Q: How successful have you been in BAT in creating a diverse IT workforce?
This is an area that is very close to my heart. While there is always more that can be done, I am proud of the rich pipeline of initiatives we have implemented to drive diversity and inclusivity throughout our function.  

In my leadership team, we have 15 nationalities, people with very different backgrounds in IT and non-IT and different industries (including tobacco, foods and beverage, pharma, consulting, mining and publishing), which helps a lot in enriching our work.

We have conducted unconscious bias and cultural awareness training for all IDT teams; we offer reverse mentoring with our millennial IDT colleagues; we have established Women in IT networking events, and Women in Leadership and Women in STEM programs.  Our IDT colleagues are also active members of many of BAT’s affinity networks, including B United (a self-governed global community of LGBTQ+ employees). Recently, IDT also launched a monthly webinar series, offering talks on topics including accessibility, inclusive language and cultural inclusivity.

But it is never enough! The work towards even greater diversity in our workforce continues.