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At Principal Financial Group, “digital” was framed not as a separate technology plan but as business strategy that depends on selected technologies. In a 2018 interview, then-CIO and Chief Digital Officer Gary Scholten described the CDO role as strategic: connecting choices such as analytics, AI, cloud, mobile and web to customer and business outcomes. The model offers a practical lesson for other organizations: decide what the business needs to accomplish, then choose the technologies that advance it.
What did digital strategy mean at Principal?
Principal adopted the MIT Center for Information Systems Research definition: “Digital strategy is business strategy that is completely dependent upon specific sets of technologies.” Scholten cited data analytics, the Internet of Things, artificial intelligence, machine learning, cloud, mobile, web and social media as examples of those technologies. The point was not to adopt every new tool; it was to apply relevant technologies in service of the company’s business strategy. Scholten’s MIT CISR interview explains the approach.
Who led digital strategy and how was it governed?
Principal placed digital strategy at the intersection of technology leadership and enterprise strategy. Its 2018 SEC investor-day filing identifies Gary P. Scholten as executive vice president, CIO and chief digital officer, responsible for driving digital strategy into all aspects of the business. It says he became CDO in 2017.
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Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →Scholten told MIT CISR that he had a dual CIO and enterprise-strategy role, and that digital and cybersecurity were recurring topics in executive committee strategy sessions. That governance approach treated digital opportunities and risks as ongoing business decisions, rather than a technology department’s occasional project review. The interview is evidence of the company’s approach at that time; it does not establish who holds those roles today.
How did Principal apply digital to its business?
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For employer-sponsored benefits, Principal developed Easy Elect to guide employees through benefit choices. It combined advanced web techniques, guided decision design informed by behavioral economics, and data analytics. Employee profiles and answers to key questions helped personalize the experience. The example shows how digital strategy could reshape a customer-facing process, not just automate an existing one.
An analytics cockpit supported investment research
On the investment side, Principal described an analytics cockpit that used artificial intelligence to process public information and internal data, augmenting analysts and supporting stock-selection decisions. At the time of the interview, the company said it planned to extend the tool beyond stocks into fixed income and real estate, while characterizing it as early-stage. These descriptions establish the intended use and reported plans, not current availability or independently measured investment performance.
What operating model supported the strategy?
Principal reported moving to 100% agile software development and extending agile practices into infrastructure and information security. Scholten emphasized that agile had to include business and IT teams working together. The organization also used managed services and API-enabled systems, and built infrastructure for AI and analytics. These practices linked delivery methods and technical architecture to the broader business strategy.
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Security and risk management were part of the same operating model. Scholten argued that digital environments widen the attack surface, so risk management needed to extend beyond information security alone. The implication for leaders is that adding data flows, APIs and digital services requires governance for the risks created by those connections, as well as investment in the capabilities they enable.
How can organizations compare digital strategies?
Principal’s examples suggest comparing capabilities and governance, not counting technology announcements. MIT CISR published broader benchmark figures in 2016: top-performing firms’ executive committees spent about 51% of their time on digitally enabled threats and opportunities, compared with 18% at bottom-performing firms. Top performers also had 51% of core capabilities available through internal APIs and 44% externally, compared with 27% internally and 23% externally among bottom performers. These are MIT CISR benchmark comparisons, not measurements of Principal itself. MIT CISR’s 2016 discussion provides the context.
| Comparison axis | Questions to ask | Principal example in the 2018 account |
|---|---|---|
| Strategic alignment | Are technology choices tied to business goals, and discussed by senior leaders? | Scholten described digital as part of overall business strategy and an executive committee topic. |
| Customer experience and personalization | Does the digital service adapt to customers’ needs rather than merely move a process online? | Easy Elect used profiles and answers to guide employee benefit selection. |
| Agile delivery | Do business and technology teams jointly deliver and refine capabilities? | Principal reported 100% agile software development and said business and IT had to participate together. |
| Data and AI capability | Are data and AI applied to specific decisions or workflows? | The analytics cockpit applied AI to public and internal information for investment research. |
| API and ecosystem connectivity | Can internal capabilities be reused and made available to appropriate external partners? | Principal reported using API-enabled systems; the MIT CISR benchmark offers internal and external API measures for comparison. |
| Cybersecurity governance | Are digital risks addressed as part of business strategy and enterprise risk management? | Scholten said digital and cybersecurity were regular executive strategy topics and warned that digital broadens the attack vector. |
What is the main lesson from Principal’s approach?
Scholten cautioned leaders against creating a separate digital strategy or letting competitors’ announcements and fashionable technologies dictate priorities. He used interest in robo-advisors as an example: the technology could matter, but that alone did not make it the right investment for every organization. His advice was to focus on business strategy regardless of the technologies used, and select digital capabilities accordingly.
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