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With annual revenue of about $5.6 billion (will change with new earnings), Owens Corning reigns as the world's largest manufacturer of fiberglass and related products. In fact, the company's Fiberglas brand products have found their way into everything from boat hulls, to automobile roofs, and electronic windmill blades. The woes of the downturn in the economy pale in comparison to the difficulties Owens Corning experience in 2000. At that time, the company filed for Chapter 11 bankruptcy protection caused by a massive liability from the settlement of asbestos related lawsuits.

The Owens Corning bankruptcy, however, kept senior executives, such as David Johns, the company's CIO, focused on steering a steady course for the business. Johns carried out a steady to take cost out of the business, while increasing productivity, and improving the governance process to make better technology investment decisions. He says, "Taking cost out of business has helped us to drive the low-cost manufacturer. The economic downturn just magnifies that situation and help promoted us to focus more on our customers. We want do as much as we need to do for them."

Enteprriseleadership.org recently down with Johns to talk to him about he has navigated his company's technology course beyond bankruptcy. Here is what he had to say:

EL. Can you describe your technology organization?

DJ. We have one global IT organization staffed with about 400 internal IT professionals. They focus on applications development, business value, business consulting. I am also accountable for our global shared services organization. A service manager handles much of our outsourced IT infrastructure. We got into outsourcing early. Third-party outsourcers handle our entire commodity IT services. We have a development team in Europe, Asia and U.S., which covers our North American/Canadian and South American interests.
 
EL. Because your company went through some tough times in the early 2000s, how have you built IT to drive the company forward?
 
DJ. From 2001 to about 2006, we were in we were in Chapter 11. We have always had tight ties to the business especially for driving global standards and common solution across the enterprise. We always have strived to customize and localize services where we required them. 
 
EL. How have you created business impact of IT throughout your tenure at Owens Corning?
 
DJ. During our Chapter 11 years, we focused on reorganizing the company and taking cost out. Being in Chapter 11 gives you a chance to rethink and do over much of the things that you have done in the past. We focused on taking cost out of both IT and the businesses. I also operated our supply chain organization for seven years. Here we focused on logistics and supply chain planning.
 
EL. Where specifically did you take cost out of IT or the business?

DJ. We took much cost of our backoffice transaction systems and our logistics organization. Owens Corning focuses heavily on logistics. After all, how we get our products to market depends on our logistics capabilities. We concentrated on more effective logistics processes, and sourcing processes.

When it comes to the backoffice, we look for more efficient and effective ways to work with and connect to our customers. We also look for ways to leverage processes across our three major business franchises, as well as the different regions of the world.

As a function, IT enables us to drive leverage. We have a purview across the enterprise that perhaps other folks in the organization do not have. We also have a focused global shared services strategy to standardize the backoffice processes that do not touch our customers. We have made these processes more visible and transparent, as well as effective. We have outsourced the processes that provide no value to our customers.
 
EL. What processes are IT focused on and why?
 
DJ. Today, we look at financial process, such as accounts payable, accounts receives, cash applications, payroll, and HR administration functions. We also concentrate on general accounting processes, such as fixed assets.

We have moved quickly into the HR administrative processes and backoffice administrative processes for our customers. We do not plan to focus on a one-size fits-all strategy for our customers. If something will not help us get closer to our closers, then we will not do it.

Sourcing is another area for us. We look for common areas across our supply chain processes. Long-term forecasting, however, has been tough during these economic times. To this end, we look at short-term forecasting.
 
EL. What types of investments have you made to get closer to your customers and to drive that revenue?
 
DJ. Our diversified, expansive customer base ranges from a local building contractor all the way to a Home Depot or a Lowes. Our businesses have done a great job of trying to understand our customers better and determine how to serve their needs. We have a customer discovery process where we go out and talk to our various customers across the various businesses. We listen to their needs and respond with how we can provide value to them. For example, customers often respond to us with in-depth interviews and feedback about what services they value from us. We then take that input and adjust it to provide our customers with the appropriate services, such as online access to EDI transmission of documents or different call center technologies to vendor managed inventory. 
 
EL. Can you tell me about specific investments you have made?
 
DJ. We have invested heavily in SAP and in some Web technology that we use today. We also have invested heavily in our call center technology that we use. We have call centers across the world.
 
EL. Where is your business impact of technology coming from?
 
DJ. Our focus is productivity, taking cost out and enabling ease of business to our customers. We want to provide an environment for our businesses and our innovation folks to engage in open innovation. This concept will enable us not only to drive product innovation internally, but externally as well.
 
EL. Can you give me an example of how you are making it easy for your customers to do business with you?
 
DJ. We allow our customers to go online and see their status of orders. That is a very simple one. Our composite business is more business-to-business oriented. As a result, we provide electronic communication to our composite customers. It allows us to interface more efficiently with them and makes it easier to do business with us.

EL. Have you linked your supply chain with your customers' supply chains?

DJ. In some ways, we have. It has been easier to connect our supply chain with those of our smaller customers than with our larger customers. Sharing forecasting and vendor managed inventory, and gaining more visibility into their supply chains has helped us to work closer with our distributors and to service our end customers better. 
 
EL. Do you know how much cost you have driven out of the business?
 
DJ. It depends on what time frame you mention. From an IT perspective over the years, we have driven out well over $100 million. From a business perspective, we have focused some technology initiatives every year in the supply chain area. We also have manufacturing technology groups that look for ways to build a more stable, less variability, more quality manufacturing technology platform. We have targets in the $25 million to $35 million a year range just on those programs alone.
 
EL. Are those technology groups part of your organization?
 
DJ. Yes! We also have a business integration group. It works with our businesses and our business leaders to understand what goes on, what issues we have, and what opportunities come our way. We then translate these things into ways technology can help us take advantage of new opportunities. That group works with the individual businesses.

We have our manufacturing technology group which works with our manufacturing group. We also have what I would call functional groups that work with finance, sourcing, HR, and legal. They go through the same kind of process about looking to apply technology to our opportunities.

We bring all of the information back and then go through a rigorous priority process -- both form a top down and a bottoms-up standpoint. As we continue to evolve more things, we begin to drive from the top down rather than the bottoms up. We have some good line of sight into some things that focused on making some good progress for the business.
 
EL. What is your formal governance process?
 
DJ. We have spent much time with other senior executives of our company to understand what the big issues are, understanding what the big strategic direction is, and then figuring out how to apply technology the best way to drive business value.

Our governance process has gone through various phases. An acquisition we made in 2007 threw our entire portfolio process on its ear. We spent much time focusing on integrating this major acquisition. Today, we have begun to re-establish our process where we will meet regularly monthly. Sometimes we will also meet quarterly. It all depends on the cycle and our priorities. 
 
EL. How do you look at your portfolio? Do you have different types of investment categories?
 
DJ. Yes! We have investment categories for productivity, cost out, customers, regulatory, and compliance.
 
EL. How do you measure the results of these investments?
 
DJ. It depends on what the investment is. Part of the investment decision rests on the quality of the business case. We have a rigorous process for business case submission. It ensures that not only do we deploy a technology that provides value that we actual track the value and make sure it is sustainable. One of the biggest mistakes many technology organizations make assumes that something can sustain itself. We rarely see this happen. You have to put the processes in place to ensure that you can sustain the project. For most of technology investments, we will track the savings or track the benefits for about a year.
 
EL. What methodology do you use to track these investments?
 
DJ. For a deployment or an investment, we use the stage-gate process absolutely. We make sure that we deliver the benefits we said we would. We have a very well defined stage-gate process that we all go through for all technology investments. We also use financial metrics such as return on investment and economic value add. Some times, we use pure cost take out and time value return. We partner with our finance organization to track those benefits that way.
 
EL. Do you use the balanced scorecard at all?
 
DJ. We have used the balanced scorecard in the past. Right now, we do not want to use it. Everything has a purpose depending on your cycle. 
 
EL. Are you getting into more analytics?
 
DJ. Absolutely! Our biggest initiative today looks at providing better visibility and analytics into our technology investment cycle. Our weakest performance over the years has been on investment patterns and acquisitions. For example, we have lacked standards within the business because of our inability to provide good analytics. We have greatly improved the quality of our analytics to the business.
 
EL. You said your company made an acquisition a couple of years ago. Have you improved the speed up the integration time?
 
DJ. It was the biggest acquisition that our company has made in quite some time. It made us a true global company. We have been successful in driving synergies, but we concentrated on building the ship while we sailed along. We have looked how to build the right approach or platform for us to speed up the integration of an acquisition. 
 
EL. How has the economic downturn affected Owens Corning?
 
DJ. It has tough economically for many companies. We are happy with where we are. We performed very well given that the economy affects how we operate. Taking cost out of business has helped us to drive the low-cost manufacturer. The economic downturn just magnifies that situation and help promoted us to focus more on our customers. We want do as much as we need to do for them. 
 
EL. Are you currently hiring IT professionals?

DJ. We are always looking for good talent who can make the company successful.

Elizabeth M. Ferrarini is a technology writer from Boston, MA. Reach her at elizabethferrarini@yahoo.com.

Corporate innovation can occur in many organizational places apart from technology. Garry Ridge, the CEO of WD-40 Company, the manufacturer and marketer of popular WD-40 lubricant, devised innovative leadership and innovative marketing programs to transform a venerable U.S. household brand into a global entity.  When Ridge became CEO of WD-40 Company in 1996, the company had become stagnant marketing one product - WD-40. In fact, the company needed more than its own lubricant to move out of its stuck gears. A strong global marketing vision, a profound concern for constituents, including employees, a desire to outsource, a well-thought out corporate strategy, and an attitude that people have learning moments rather than failures all helped Ridge succeed.  In 2009, Ridge collaborated with Ken Blanchard, the best-selling management book author, to write Helping People Win at Work:  A Business Philosophy Called "Don't Mark My Paper, Help Me Get An A." The book profiles many of the innovative leadership principles Ridge pioneered at WD-40 Company.

Enterpriseleadership.org sat down with Ridge to learn how he turned a one-brand U.S. company into a well-oiled global marketing and sales machine offering a variety of industrial and household lubricants and cleaning products. Here is what he said:

EL. What challenges did you face when you become CEO of WD-40 Company?

GR. Being the CEO of a company these days has to be something you really want to do, whether you are selling Apple computers or WD- 40. The responsibilities and the depth of the needs differ greatly today than last year or 10 years ago, especially with the changes in regulations. On the WD 40 side, we had a company conditioned to do the same thing for 40 years. Every time the company woke up every day, it sold the only product it had - WD-40. The culture and the operating style had to change. We said that we had to wake up one day and do things other than WD-40. That became a major challenge. The transformation consisted on going from silos of knowledge to what I call fields of learning. Everyone knew most everything about what we did. To bring in new ideas and ways of doing things, the culture needed to change so we could challenge ourselves to become competent in a few new areas. Changing a corporate culture is not easy to do. You are dealing with the most precious and the most complicated thing in the world -- people.

EL. How did you begin the transformation?

GR. Back in the early 1990s, I went to a national retailing association seminar where I heard the vice chair of Wal-Mart speak. He said that if you want to survive tomorrow, you have to separate it from today. That statement stuck in my head for several years. Because we had never done anything like this before, we formed a group of people who would just focus on future revenues. We started with our research and development group, which we called Team Tomorrow.  I selected one of our long-standing executives who thought globally and had a marketing background as the Team Tomorrow leader. We set this organization on this track. We gave them a goal to create $100 million worth of incremental revenue within a specific period. We wound up beating that goal. After the fifth year, the team generated $165 million worth of incremental revenues.

EL. How did you begin to drive innovation and conquer additional global markets? 

GR. We had a three-prong strategy. Our first goal was to expand our distribution globally. Today we sell more WD-40 outside the U.S. than we do in the U.S. That is a robust growth area for us. We said what geographic opportunities look good and how we should attack them. We set up an operation in Europe. Our operation there today is larger than what the entire company was back in the mid 1990s. It is in excess of $100 million in revenue and has had an annual compounded growth rate of about 19 percent for the last five years. We opened an operation in Malaysia to manage our Asian operation. Recently we opened a subsidiary in mainland China.

Next, we wanted to expand by brand. We looked for some strategic acquisitions. We acquired four brands over a period of five years. Then we said, 'What sort of business do we want to be in?' We had an obvious answer to this question, 'We are going to be in the squeaks, smell, and dirt business where we get rid of squeaks, smells, and dirt. We can to do it with products that deliver exceptional performance at extremely good value.' Where we have the right to play is where we have our greatest strength.

Last, we wanted to expand our trade channels by selling WD-40 in multiple trade channels. You can now get it in hardware stores, grocery stores, home and industrial stores, and sporting goods stores. Most products limit themselves to one trade channel.

Based on the strategic analysis of our organizational strength, we looked at what products, brands, or extensions of those brands could help us to derive more revenue. As a result, we expanded into the 3-IN-ONE brand, which was one of our acquisitions. We extended that from regular drip oil into a full range of multi-purpose maintenance products. We took that to the world. We are in the middle of further expansion in the new brand called BLUE WORKS. It is an industrial high-end range from the WD-40.

EL. What is your revenue like right now?

GR. For fiscal 2008, we did more than $300 million. Revenue for fiscal 2009 was slightly less than $300 million. On a consistent currency basis, we would up marginally on last year right now. With the strengthening of the U.S. dollar against the pound, we have lost about $30 million internationally by translation only. Last year we had translated European business into the U.S. at $2 per pound. It has been as low as $1.40 per pound. It just disappears; you cannot do anything about it.

EL. What kind of investments did you have to make in technology to develop new products?

GR. We invest between $3.5 million to $4 million a year in our Team Tomorrow, which is now our research and development area. We outsource much of the functions of the research and development. I jokingly say that we have the most up-to-date research lab in the country because we go out and rent what we want on a daily basis. We do not have a building full of scientists. Instead, we have many scientific partners. We will ask them to help us develop this product. We manage the process more than do the work. Outsourcing for us has been economically feasible because we always have access to the latest technology. If we had to maintain our own Web site, we would need to update it daily. We can do go out to the most modern places and ask the brightest in the world to help us.

EL. Did the transformation change your governance, and strategy development and execution?

GR. Yes. We became more inclusive with our people. We say that we do not make mistakes. Instead, we have learning moments. A learning moment is a positive or negative outcome of any situation. In fact, the learning moment has been the backbone of the change that we had.  I have a Web site called the LearningMoment.net, which has much of our philosophy on it.

EL. Did you dabble in analytics for sales, marketing, and distribution?

GR. All of the time! It is part of our determining where we have the right to win and the right to play. We look at trends within categories, where markets tend to move, and what trade channels deliver more than other channels. We also look at if our consumers move from where they shop. We look at that globally because it changes in every country of the world. The analytical database and information base in China will differ from that of the U.S. Most of our business in China goes into more industrial and manufacturing. In the U.S., our business consists mostly of household and home consumption. We certainly look at these leading indicators of where business is moving.

EL. Can you share an anecdote about the challenge of marketing WD-40 globally, such as in China?

GR. We tend to do grassroots marketing. For example, several years, I had a booth at a Chinese trade show where we sampled our product to Chinese industrial factory workers. No one paid attention to me because my Chinese description of WD-40 translated to lubricant. I asked myself, 'Why don't these people want a lubricant?' I could not help noticing the line of people picking up empty paper bags at the Toyota stand. I quickly realized that these people could use the bag to bring home rice from a store. To them, lubricant meant dirty diesel oil, which they did not need. Based on our additional research, we changed our message to pitch WD-40 as an anti-rust lubricant. They could easily relate to rust. Within minutes, we had security guards on our stands stopping people from destroying it. People were in a frenzy to get the product. This example became a learning moment. You need be awake enough to understand if there is a need, and you identify that need in the market correctly.

EL. Can you describe the research you do to make sure you have the right product technology? Do you leave that to your outsourced partners?

GR. We do all of that. It starts with the end users. Our research consists of following our end users around. We do focus groups. We do broad-based Internet concept studies. We use all of these tools. We had a company called Edison Nation go out and ask end users to suggest new products and uses for WD 40. We use as much about the customer or about the user information as we can. Then we take that into concept testing. We have used all of the tools that are available from time to time.

EL. Are you doing anything with social media such as Procter & Gamble?

GR. Yes. We just set up a program where we put out a social media page. It asks people to share with us their money-saving tips for using our products.
Before social media became commonplace, we formed the WD-40 Fan club. In 2000, we went to our end users and we ran a competition. We wanted to know their favorite use for WD-40. In the U.S., we got 400,000 entries. We distilled that down to the top 2,000 uses. At last count, the WD-40 fan club has 135,000 active members. They interact through out Web site. We feed them user information, such as tips about WD 40. We reach out to them for research.

EL. To go global what changes did you make to your supply chain?

GR. Globally we mirrored what we did anywhere else in the world. We outsource all of our manufacturing except for the manufacturing of the secret formula for WD-40, which we control very tightly. We found good quality aerosol canners and liquid fillers all around the world. We pay attention to quality. We verify and approve all of our outsourced partners. We look at their capabilities and capacities.

EL. Because WD-40 is such a popular brand, was it hard to introduce other brands?

GR. Yes, that gets back to my statement about this not being an easy company to change. Because the thinking was around one thing, we needed to develop things such as learning moments. We also needed to pay much attention to vision and values that drive our behaviors. We invest so much in the development of our people and education and learning. We are a living learning laboratory here. The biggest barrier to any thing in life is fear. It comes out of people being afraid to make mistakes.

EL. Did management have to go through a transition to change this company around?

GR. Fortunately, since we started this program, we have had some impressive retention numbers here. We look at ourselves more as a tribe rather than a team. Nobody has the right to get in the way of people doing magnificent work. I challenged our management team to rally to this thinking. It is their job to make their people successful. We focus on that. In the book, we took at our entire process of coaching, mentoring, and enabling people. Today, many middle management people in the backroom make the decisions that drive how the day-to-day organization functions. We need to include these people in the issues and ask them to help management solve problems. People at the helm should not be afraid to say, 'I don't know.' I say this all of the time. That is why I surround myself with smart people.

EL. How do people articulate the value they provide to the company?

GR. It gets down to a giving people the feeling of doing meaningful work. At WD-40, we say we are in the memories business. We strive to create positive lasting memories with our customers, our end users, our employees, people, our shareholders, and our partners.

Elizabeth Ferrarini is a technology writer from Boston, MA. Reach her at elizabethferrarini@yahoo.com.

If Tom Adams has his way, his company, Rosetta Stone, could become the Google.com of the $83 billion language learning product industry. Rosetta Stone's disruptive technology enables people to learn a foreign language in an interactive, immersive methodology. The company markets its more than 30 language learning products in more than 150 countries. The millions of customers include the U.S. Army, U.S. State Department, Reuters, and Marriott Hotels. When Adams joined Rosetta Stone as CEO in 2003, annual sales were a palfrey $10 million. His emphasis on technology innovation, and innate immersive language learning helped the company to grow revenue to more than $200 million for 2008. In 2009, the company took a confident giant step by doing an initial public offering. Adams says, "We raised half of the $112.5 million total ourselves. The rest came from the sale by our private equity backers. On the first day, the stock went up close to 40 percent. Because our business was doing well, we felt comfortable going ahead with the IPO."

Enterpriseleadership sat down with Adams to learn about his strategy for growing Rosetta Stone. Here is what he said:

EL. What are some of the factors that have contributed to Rosetta Stone's growth?

TA. The company has grown tremendously because the market is very large and disruptive. We differ from other companies. We are more cost-effective, and a more convenient way to get great results when you learn a language. We eliminate the need to spend thousands of dollars on classroom solutions. In an economic environment, people look to get more bang for their buck and that makes us more compelling.

EL. Can you frame this context of being disruptive?

TA. We teach in a technology enabled way with an immersion method. We do not explain the language. You learn the language the same way you learned your first language. The way babies learn. Toddlers figure out the language by themselves and parents sort of point to stuff. There is a context around the child. We leverage your innate ability with both structured activities and curriculum sequence. In effect, you learn very naturally. That has been very successful because you use your natural language learning ability.

What makes us a disruptive technology company? You can pass tests after you have taken language training with other offerings, such as tapes, books, CDs, online offerings, and classes in school. On the other hand, most likely you will not be able to speak the language to any great degree. People focus on wanting to learn to speak a new language. They do not want to learn how to translate literature in a foreign language. That is how we differ. If you really want to learn to speak a language, you can spend the money, stay in the country for weeks, and immerse yourself in the language. That is a proven way of successfully learning a language. Few people have the time or the money to do that. We have that same immersive type of offering, but we deliver it in a very convenient technology-enabled way.

Based on findings from our massive Nielsen Research study, we learned that people spend more than $83 billion on tools and classes to learn a language. Institutions represent an equal amount of demand again. We have not been able to conduct a survey to get that type of data. Organizations spend massive amounts of money on language training products that are inferior to ours.

EL. What is your growth rate like?

TA. Since I have joined the company, we have had a 20- fold expansion in revenue. In 2008, a challenging year for us, we grew 53 percent. Our revenues last year were $209 million. That was the largest growth year for us. Like everyone else the economic downturn has affected us. For example, because people have been traveling less, we have seen less activity at our airport kiosks. People have to be more careful with the money their because credit is in short supply. Despite all of the things, we still grew at an incredible rate.

EL. What is behind your product's technology? 

TA. We have two kinds of technologies that drive our company: the digital technology and the pedagogical technology. The digital technology leverages our interactive technologies such as speech recognition. The second technology leverages our method and unique teaching system. Our product improves over time as we innovate and find better ways of effectively teaching our technology to speak a new language interactively. Likewise, as the competency of our speech recognition technology expands, we will be able to provide augmented experiences in our offering. You will be able to use your voice to drive a learning experience inside our offering. Again, all of this might sound complicated or abstract, but it is very simple when you start to use the product.

EL. How much do you invest in technology to drive the innovation?

TA. We invest about 10 percent of sales. We have maintained this investment rate for the past several years.

EL. How do you decide what you are going to invest in?

TA. We are a vision-oriented company rather than a customer-oriented company. We do not look to the customer to tell us what to do. We talk to the customer extensively. We try to understand what their problems, such as why they struggle with current methods, and current tools. We are all about customer insight. On the other hand, we do not worry too much about what they say they want. 'Why?' Most people work within the old paradigm of traditional language instruction. We look at what language learning should be like, how it feels, and what you should learn.

EL. What is your business process for making these investments as a visionary company?

TA.  Our senior product team tries to figure how specific innovative technologies can help us move the dial for people who want to learn languages. From here, we will start to define a product concept, design and build, and iterate as we go along. We test the efficacy of our product on an on-going basis. None of us speak 30 languages. Some of our speak six or seven languages. To this end, we can try a new language fresh and see what it would be like for a new learner. This approach gives us a rigorous innovation.

EL. Do you work with your IT organization to make these investment decisions?

TA. Yes. Our IT organization gets involved in that we do. IT, however, functions as more of a support service for what we want to achieve. For example, we depend on our IT staff to track students' activities and progress. We work with them to make sure we follow through on our customer support. CRM applications are important here.

EL. Do you package the product in such a way that you break it into different types of modules for different types of experiences?

TA. Yes. For example, our level 1 and level 2 comprehensive curricula provide us with enough language so you can manage in a country. You will be able to every day functions done in that country. In level 3, you move toward being able to connect with people. You will be able to talk about your opinions, your feelings, and more abstract notions. A grammatical progression follows that.

We currently offer five levels in both English and Spanish. You get about 200 hours of instruction. Most people opt for the three levels. People who try to learn enough of the language for a vacation usually opt for the single level.

Although our mission is to teach you to communicate verbally, we teach both reading and writing comprehension.

EL. Are you looking at leveraging this technology with other types of products?

TA. We plan to launch an online socialization offering. It would allow you to practice the language you learned with reverse sound with other native speakers. For example, a French learner would use his or her voice to interact in a software environment. We augment that by allowing you to go through conversationally coaching class. Here you use the language you have learned to practice speaking with a native speaker. That person is exercising your speaking ability. Beyond that, we will be enabling you to mix with French people who want to practice their English. You will do a language exchange activity with them in French for five minutes, and then the activity will turn to English.

EL. How does your speech recognition technology work?

TA. Speech recognition is one of the unique things about our product. We have developed a proprietary speech recognition technology. For example, as you speak a particular phrase in French, the speech engine will recognize each word you say, and it will highlight the words that you said very well. It will be clear that you said some words not well. If you really said the wrong thing, it will not accept your answer. That is extremely powerful.

When we task people why they want to learn a language, everyone says that they want to speak it. If they use language tapes or CDs, they do not get any feedback from these methods. They do not know if what they said is right or wrong. With us, the system gives you voice prints.

EL.  How are some of your more established competitors falling short with technology?

TA. Berlitz is one of the oldest, established language training companies. It still uses the bricks and mortar classroom approach. It does offer some videoconferencing. This company does not an interactive, proprietary technology the way we do. They are not investing in speech recognition either.

Many companies use technology in the language learning space. They, however, rely too much on translation. They think that the old ways of memorizing vocabulary lists, understanding the difference between direct and indirect objects, and conjugating verbs are a valid way to learn a language. They operate operating on a flawed assumption.

EL. What takeaways would you give to someone you are at the helm of a company involved in disruptive technology? What can management people from your company besides a language?

TA. Do not give customers what they want; give them what they need. Customers struggle with saying what they really want. If Henry Ford asked people what they wanted, they would have said faster horses. Instead, he built a motor car. You have to understand what people really need. Do not listen to customers too much, but care about them enormously.

Do not focus so much on your competitors. If you study competitors over time, you will end up being like them. Happy companies make a difference, especially if they are comfortable and visionary in their own skin. They also need to be passionate about what they do and strive not to be outstanding, not incrementally better.

EL. What is your view of language education in schools?

TA. Education has had too little innovation. Yes, people spent money on technology within school environments or university environments. They, however, have gotten very little for their money. We really do not focus on true innovation within the learning state. Rosetta Stone is only doing this in the language space right now. We think we can transform our schools and make effective pedagogical innovation in language learning.

Elizabeth Ferrarini is a technology writer from Boston, MA. Reach her at elizabethferrarini@yahoo.com.

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In this podcast, Steve Cakebread, the former president of Salesforce.com, takes the mystery out of cloud computing by explaining the complementary relationship of Salesforce.com, Google's Apps Engine, and Amazon's Web Services.

When Steve Cakebread joined Salesforce.com in 1999, the company had not even introduced its first product. That event happened two years later with the introduction of the single CRM product called Singular Edition people. Today, Salesforce.com has moved beyond CRM to become a diversified company in platforms such as knowledge management and service support. Cakebread says that these new platforms will help to spur the growth of the cloud computing industry.

Meanwhile, cloud computing has got a shot of adrenalin with the likes of Amazon.com's Web Services and Google.com's Apps Engine. Amazon.com built its business around store fronts and logistics, while Google.com's built its business around a consumer's ability to search. Cakebread says, "Amazon's Web services help businesses create those storage fronts on the fly through collaboration or cloud computing, as well as to provide businesses with additional storage and computing power. If you look at Google.com's Apps Engine, it is now creating developer platforms that make it easier to add information for consumers to share in businesses network."

Cakebread says that these three entities have a complementary relationship with each other through various relationships and partnerships. "Each of these technologies, even through they are considered cloud computing, all have different strengths. Salesforce.com is the business platform provider. Google.com focuses on search, while Amazon.com focuses on store fronts, logistics, storage, and computing power. All of these technologies are internally designed on the same technology platform as Oracle Solutions and blade services. The reality is that their architectures are very different, but they can be used by platform developers to achieve service and reliability."

In this podcast, Cakebread also discusses the key technologies that will benefit from cloud computing, the other areas in which both cloud computing and Web 2.0 will enable innovative enterprise applications, and the issues that need to be resolved before companies can deploy cloud computing widely.

Bio

Before becoming CFO of Xactly Corp., Steve Cakebread was the president and chief strategy officer at Salesforce.com. He had been the company's CFO for six months. During his tenure as Salesforce.com's CFO, Cakebread helped to grow the company from $22 million in annual revenue in 2002 to about $749 million in revenue in fiscal year 2008. He also led the company through its initial public offering in 2004.

Cakebread came to Salesforce.com from Autodesk, where he served as senior vice president and chief financial officer. Prior to joining Autodesk, he was vice president of finance for Silicon Graphics. He has also held many key positions at Hewlett Packard.

Cakebread holds a B.S. in Science from the University of California at Berkeley and a MBA from Indiana University.

Resources
Podcast -Steve Cakebread on SaaS, sales performance management, IT Knowledge Exchange

http://itknowledgeexchange.techtarget.com/voices-of-crm/steve-cakebread-on-saas-sales-performance-management/

SaaS & the CFO: A Special Webinar with Steve Cakebread

http://www.opsource.net/event/saas-cfo-%E2%80%93-special-webinar-steve-cakebread

Salesforce.com exec named Xactly CFO, Silicon Valley Business Journal
http://sanjose.bizjournals.com/sanjose/stories/2009/02/09/daily51.html

Production Credits
Elizabeth Ferrarini, Executive Producer
Tom Parish, Host and Audio Producer
Audio Editing by Doug Marcis

For the past five years, Enterpriseleadership.org has been on a mission to bring you interviews with the most influential people in information technology. These people include C-level executives at global corporations, academics from major graduate schools of business, top industry analysts, and best-selling management book authors and consultants. Two and a half years ago, we saw the viability in interviewing Howard Schmidt, who was recently appointed as the new White House Cybersecurity Czar. In this position, he will orchestrate the government’s strategy for protecting information network, and coordinate cybersecrutiy activities and policy across the federal government from the military to civilian agencies.

When Enterpriseleadership.org interviewed Schmidt, he was promoting his book, co-authored with Tom Ridge, called Patrolling Cyberspace – Lessons Learned from a Lifetime in Data Security. Schmidt got his first exposure to federal government security when he was appointed by George W. Bush as the vice chair of the president’s Critical Infrastructure Board in December 2001. The board reported to Tom Ridge, then director of the Dept. of Homeland Security.  For the past few years, Schmidt has worked as a consultant with Trident Capital, an international venture capital firm. Below is a link to Enterpriseleadership’s org interview with Schmidt:

     http://www.enterpriseleadership.org/blogs/Articles/2007/08/27/interview-howard-schmidt--former-white-house-cybersecurity-czar

Why are some major companies good at driving corporate innovation in technology? For some answers to that question, Enterpriseleadership.org turned to Dr. Ron Pierantozzi who built his entire career on driving corporate innovation in a technology-related company and doing research in this area. Before retiring from Air Products, a $10 billion supplier of industrial gases and chemicals, Dr. Pierantozzi was the company's director of business development. He worked on new venture creation and technology transfer. He also served as Air Product's director of technology. Since retiring, Dr. Pierantozzi has been a member of the Radical Innovation Group, a consulting firm that works with global companies to develop their innovation capability. He lectures at the Wharton Business School, and was an executive-in-residence at Rensselaer Polytechnic Institute's Lally School of Business. The holder of 32 U.S. patents, Dr. Pierantozzi co-authored the article, Implementing a Learning Plan to Counter Project Uncertainty, which appeared in Sloan Management Review, January 2008.

Here is what Dr. Ron Pierantozzi had to say:

EL. Can you briefly describe the innovation programs at Air Products?

RP.  We had a couple of different things going on. I worked on the business development team, structured as a separate organization. It reported to the development organization and aligned parallel to the technology organization. We focused on new market entry, new business ventures, and new business starts. We also invested in startup businesses to generate new ideas and new technologies. Likewise, the technology organization had teams focused on developing products and bringing them to market. This organization reported to the office of the CTO. It had a number of different processes in place to develop new opportunities.

EL.  Did both of these organizations have people dedicated to innovation and nothing else?

RP.  In the new business development group, we had between six to 14 people whose only job it was to create new business opportunities for the corporation. They looked primarily outside the existing markets and existing capabilities. They looked to new emerging markets in technology or market trends with the goal of developing ideas around how to create large business opportunities. I managed that group. It would grow depending on how the opportunities grew. We supplemented our permanent staff with consultants. The technology organization was organized the same. We had a corporate research group whose job it was to create new long-term technology options for the company. It was a corporate entity. The funding did not come directly from the business units.

EL.  Can you describe Air Product's corporate innovation program?

RP.  The education program began with the idea for creating new opportunities in the company. The tool sets we had were not appropriate for innovation. These tool sets focused on building incremental new products or reducing the cost or improving the efficiency and productivity of our existing capabilities. We began to bring in educators to help us develop the new tool sets we needed. The process included bringing in people from the Radical Innovation Group. They worked with us on how to identify opportunities in highly uncertain markets, and how do deal with bringing folks from the Wharton Business School to work with us on the discovery-driven planning methodology. As activity grew, we began to formalize this program under the auspices of a quasi Air Products University. Within it, we were already doing things around Six Sigma and project management, and quality. Inside of this, we created the innovation college. Within it, we began to teach classes ranging from creativity to how to develop market opportunities, and assess those opportunities, right up to the execution of new businesses and new startup opportunities. At one point, we had 35 courses in the innovation college ranging from creativity to business execution. I am still involved in teaching some of those classes.

EL.  Can you describe some of the methodology that has come out of the Radical Innovation Group's seven-year innovation project?

RP.  I was involved with this Group for several years. The initial aspect of this Group and its methodologies included tools around planning for uncertainty. Most large companies operate on information culled from their existing businesses or existing experiences. As you look beyond your current technologies and current markets, you see many uncertainties. There are many assumptions that come into our thought processes. With the Group, it initially developed a set of tools that enabled us to manage those uncertainties at the very earliest stages. We called that the learning plan. It has grown not only to a set of tools, but to a set of organizational competencies.

Within the innovation process, the Group can identify the required separate competencies.  For example, discovery incubation acceleration is a competency. It is the discovery of new ideas, and new opportunities. The incubation focuses on formulating them and experimenting with them to get to a reasonable business proposition. Acceleration looks at growing them to a commercially successful entity or business or technology.

You also need a set of competencies that differ from anything else you have in the company. The idea of having a functional capability in innovation included both the competencies, tools, and the career paths for the individuals who work on the innovation processes.

EL.  How do you feel about open innovation communities such as InnoCentive?

RP.  InnoCentive and Nine Sigma are great tools for tapping the minds of the global audience. Companies need to tap into these tools as much as they can. You need to get outside of your own company. Open innovation enables you to do that. Companies not only need to do that, but they need to have their own people spending some of time outside the existing company walls. For example, although Air Products is an industrial gas company, we would have people going to conferences that dealt with IP infrastructure for machine-to-machine services. It presented an emerging market opportunity for using IP to develop decision processes and analytics. We were doing it internally to some extent to run our plant. We wanted to get out and learn how to develop businesses in those kinds of markets.

Open innovation goes beyond using InnoCentive or Nine Sigma. Those two communities are part of open innovation. You need to get the innovators and the business leaders out into new spaces. They need to get outside of their existing business comfort zone and seek more insight from sources such as universities, startup companies, conferences, and emerging markets.

EL.  What is the status of innovation right now in U.S. companies given the economic downturn? Is it something we need to focus more on?

RP.  Companies are focusing less on it. Instead, they are working on improving their bottom line in this economy. There is not much top-line growth going on right now. I should clarify that I have not done a rigorous statistical analysis to know the extent of this. Obviously, there are exceptions to this comment. In reducing that cost, companies have eliminated much of the longer-term focus around innovation and new products. Instead, they have focused their new products organizations around products that have more reactive market payback within 12 months to 18 months. Because of the economic downturn, companies have cut their long-range research and development. In the long term, this could potentially prove disastrous not only for companies but for innovation in this country. That is a big issue.

The question: Should they be doing more innovation? As an outsider from the Wharton Business School, I find it easy to say 'Yes' they should be doing it. Senior managers have a difficult time deciding to spend money on things that will not happen for three- to five-years, especially when the company is struggling to get in the black. Some of the forward-looking companies have started to increase their innovation efforts. I see some light at the end of this tunnel.

EL.  What takeaways would you give CIOs and CTOs about innovation? 

RP.  If you talk to CTOs about building some functional capability around engineering or chemistry, they would know exactly what to do. They would put in place a set of guidelines, strategies, and hire the right type of people to drive the right type of programs. They need to do the same thing around innovation and around longer-term growth opportunities. We keep treating innovation as though it is something similar to what we do today. We just need to take a couple of bright people and put them in jobs to go after innovation. The reality is the way CTOs and CIOs need to think about this. Innovation is a function, but it is a different function than what we do today.

The Radical Innovation Innovation's study at Rensselaer looked at the importance of innovation as a function. This function, according to the study, needs to include a set of tools, a set of capabilities, and a group of people who see a career path in this. If you do not have these things in place, then it will be difficult to carry out innovation. You might take a one-off kind of innovation occasionally. For the most part, sustaining this type of innovation would be extremely difficult. My simple one line message to CTOs and CIOs is this: Start thinking of innovation as a function and do exactly what you have done in your other functions to build the capability.

EL.  At the Wharton Business School, you teach a course in entrepreneurship and innovation. What was the 2009 response to this course?

RP.  I teach on the West Coast in Silicon Valley in San Francisco. The course has always been popular. This year we have the highest number of students that we have ever had. At one point, enrollment was nearly doubled what we had in 2008. Is that due to the economy and everyone thinking they want to start their own business? Is it due to us doing a good job teaching the course? I cannot explain the reason for the spike in enrollments. My class a year ago was probably the most successful class I ever had. Six of our business plans made it to the semi-finals of the Wharton business plan competition. We see many young engineers and managers of large companies (this latter audience populates our executive MBA program) thinking they want to go off on their own. Perhaps, they do not see the growth and career opportunities in their own companies.

EL. What made the two different innovation departments at Air Products successful?

RP.  It was many things. We got people out of their comfort zone. We had a group of people who went out and found new things. We had a group of managers who spent time on it. We used to meet with the senior management team monthly to talk about ideas. Senior management put an enormous amount of effort into helping and thinking about the growth opportunity. It turned into the growth board comprised of the senior-level executives who controlled 90 percent of the resources of the company. They focused on what new opportunities we looked at, and what we did. This type of thinking and support contributed much to the success. Then we taught people how to do things. We learned that you could not use the existing type of Six Sigma stage gate tools to drive long-term innovation. You needed a set of different tools, like the learning plan methodologies and discovery driven growth.

EL.  Did you work with the CIO at Air Products?

RP.  Yes. We launched a couple of business initiatives that dealt with IP capabilities because the company was into this type of monitoring. The CIO sat on our advisory board. He understood the needs that we had from an IP perspective. He was a manager looking outside the company. At the time, our IT organization primarily focused on infrastructure support, which is what most IT organization in large companies concentrate on. We needed to go outside and get some development capabilities. He was a strong supporter of the innovation capabilities as they related to IT.

EL.  Are you seeing much innovation from U.S. companies?

RP.  Emerging companies right now face the challenge of lack of capital. I am on the board of two emerging energy companies that have a fair amount of innovation going on, but they have found it difficult to raise money from the venture capital community.  A decade ago, VCs had no qualms about funding companies. During 2008 and 2009, VC cut back substantially on funding new ventures.

Meanwhile, large companies face a similar dilemma around funding new ventures. They, instead, look for more sure bets rather than taking a risk. Everyone wants to put their money in a sure bet. Sure bets often do not turn into big new things. People like Andy Grove are not convinced they will see the next Google or Microsoft. I do not think there is anything like that out there now. Today's good technologies will not turn into major innovations that will drive the next generation of growth in this country.

EL.  Where do you think the next information technology innovation will come from?

RP.  We now have the Internet and tremendous IP capability. This entire issue of smart services will probably be the next area of innovation. Much of the runway there can create a tremendous amount of value, particularly in the energy space, as well as other industries. Many service layers need to be on top of this capability to drive not only Web 2.0 kind of stuff, and social networking, but real industrial-type analytics that allow us to drive smart services and decision-making. This one area of the IP space still has opportunity.

Elizabeth M. Ferrarini is a technology writer from Boston, MA. Reach her at elizabethferrarini@yahoo.com

In this podcast Vid Byanna, executive director of Accenture's internal IT infrastructure, talks about his company's and collaborative computing, and cloud computing initiatives.

Each day the 177,000 employees at Accenture, a $19 billion global IT services company, must communicate effectively with 1,000 of customers in more than 120 countries. In fact, Accenture executives often find themselves looking for internal experts who can support specific customer engagements.  The traditional process has involved emailing one's network of colleagues to help with the search. Now these executives can use Accenture People, an internal version of LinkedIn, to search the company's global network of employees.

Accenture People comprises Accenture Collaboration 2.0, a global set of technology initiatives to improve knowledge sharing, enhance communication, and allow for dynamic collaboration within the organization. Technologies in this collaboration platform include social networking applications, greater search functionality, telepresence, and unified communications.

Vid Byanna, the executive director for Accenture's internal IT infrastructure capabilitities and Web 3.0 initiatives, says that Accenture Collaboration 2.0 allows employees quickly to get access to the information from experts who can help resolve an issue, or kick start things that deliver value to customers better than through traditional methods. For example, 30 minutes after looking in Accenture People, an employee was holding a telepresence sessions with an Accenture expert on digital media communications."

Meanwhile, with the help of the Accenture Cloud Opportunity Assessment Tools, the internal IT Accenture organization also has developed a cloud computing strategy. It consists of both internal and external cloud computing initiatives. He says, "We think of cloud computing as dynamic resource allocation of computing capacity, storage and other resources. It gives us the ability quickly to provide these resources for peaks and valleys in IT resource demand. We have heavily invested in our internal cloud by consolidating all of our business applications in a single data center. We also have virtualized our servers, databases, and storage. We are now looking at what external cloud providers can give us. Will these services supplement what we have, or will they give some more scale capabilities?"

In this Enterpriseleadership.org podcast, Byanna talks about the following:

• the catalysts for Accenture Collaboration 2.0 platform,
• the key technologies that comprise this platform,
• the different ways Accenture plans to extend its internal collaboration initiatives to partners and customers,
• the Accenture cloud computing strategy,
• and the benefits the company plans to derive from cloud computing.

Bio

Vid Byanna is the executive director for Accenture's internal IT infrastructure capabilities. He reports to Frank Modruson, Accenture's CIO. Byanna also drives the implementation of IT products and services to support the company's mergers and acquisitions organization.

Before stepping into his current role, he held other IT leadership position in Accenture's CIO organization. From 1989 and 1998, Byanna was part of the company's communications and high-tech operating group, where he directed large solution-oriented projects for global telecommunications providers.

Byanna received a B.S. in Computer Science from the University of Illinois at Urbana, and a M.S. in Computer Science from the Illinois Institute of Technology. Before joining Accenture, he worked at Bell Laboratories.

Resources

Accentures Topples Communicatons Barriers, InfoWorld

http://www.infoworld.com/d/networking/accenture-topples-communication-barriers-745

http://www.accenture.com/Global/Services/CIO/LeveragingNeeds.htm

Production Credits

Elizabeth Ferrarini, Executive Producer

Tom Parish, Host and Audio Producer