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11 Posts authored by: elizabeth ferrarini

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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.

 

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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.

 

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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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What does the Apple's computer mouse, Oral-B toothbrush for children and Palm V handheld organizer have in common with each other?  Each company designed its respective product with the help of engineers from IDEO, one of the most recognized global design firms.  Since 1991, IDEO has helped to design more than 3,000 new products and to reinvent many established Fortune 500 companies.


IDEO's name has become synonymous with innovation. BusinessWeek has ranked IDEO in the top 25 most innovative companies in the U.S. Meanwhile, The Wall Street Journal dubbed IDEO's office, Imagination Playground. The company has become the subject of two books: The Art of Innovation and The Ten Faces of Innovation.

 

Collaboration among IDEO's clients and myriad of engineers who specialize in discipline ranging from human factors to interaction designs has played a critical factor in the company's success. Doug Solomon, IDEO chief technology officer says, "Because we are not content experts about the thing the clients come to us about, we need to learn from them and their colleagues, and them share this information with our colleagues." In fact, Solomon and his design team devised a collaboration platform, called the Tube, to improve the cross-pollination of ideas across global constituencies.  Employees generated more than 1,000 pages six months after the Tube went live.

 

Enterpriseleadership.org sat down with Solomon to discuss what design considerations that went into the Tube and what CIOs can learn from them.

 

EL. What challenges did you face in designing a collaboration platform for a company such as IDEO?

 

DS. We have employees in eight offices on three continents. In the past, we worked in a distributed manner locally with our colleagues. We might have five or six people meeting face-to-face to discuss a project. Now our global clients expect us to collaborate around the world. We had the challenge of scaling our local work process to how best to collaborate across all of these time zones.

 

Experiencing something works best when it comes to innovation. As a result, we like to take our clients on observations in the field, such as on shopping visits, or looking at analogous kind of problems and other companies in the ecosystems. We had to find ways to make it easy and convenient for our clients to be part of the process without having them be physical with us the entire time.

 

We also work with people in the ecosystem who might be affected by some product or service or idea we work on. We use an anthropological type of methodology where we do more than interview them. In fact, we might live with them, go to work with them, or go shopping with them.  Since our projects are so diverse, we never know in advance what kinds of interests and people we want to speak with.

 

EL. How did apply your experience as an innovation company to the design of your collaboration platform?

 

DS. We treated ourselves as if we were a client of IDEO. We used our human senses design techniques and methods to observe our environment. We talked to people to understand how they would like to collaboration, but felt it is difficult to do at this point. We looked at the culture within IDEO to understand what would motivate people to share what they knew. We looked at what kinds of technologies we could experiment with and use for system prototypes. We also looked at our business constraints to make sure we could support this initiative.

 

EL. Can you summarize the concept of the Tube?

 

DS. We designed the Tube, which is our Intranet, based on the London subway system. It connects all of the people around the company, and provides them with a way to share information with each other. Some parts of our Tube consist of homemade components. We designed a consistent, human interface based on Ruby on Rails and other Web 2.0 technologies. It pulls in information from many of our legacy information systems, such as project management and time cards. We also have third-party tools we have built in. For example a screen sharing tool makes it easier for anyone here to make a presentation to a client or a colleague in another office. You just click on a link and you automatically you will have your screen starting to share with whomever you would like to invite.

 

EL. What are the various page types that one has available via the Tube?

 

DS. Our system is built around a number of page types, such as people pages similar to Facebook.  Active Directory pulls in a person's official data, such as phone number, to create the page. People can also describe themselves in anyway they like to pull their official biography. They can turn their bio into a PDF document, click on a link, and mail the bio to a client. We have project pages that have a start date and an end date. If someone enters a new project, then the system will pull in all of the people who have ever worked on that project. The information will include their bios, photos, and email address.  Our digital assets pages pull in all of the different rich media, such as videos, PowerPoint presentations, images, or documents of any sort.

 

EL. What tagging capabilities do you have in the Tube?

 

DS. We also have tagging built throughout the system. You can tag every kind of object, such as rich media. You can search on the tags, on the people, and the digital assets. You can easily search them across our entire system. All of these associations are noted. You can easily find who you should talk to about something, in addition to reading about it. We call this feature our knowledge sharing rather than knowledge management.

 

The data feeds pull in feeds from external sources, such as blogs. You can even push out internal information, provided it is not proprietary, to external blogs. We have very little top down control of the information. Users generate everything except for a very small piece of our home page. Here our internal communication groups tell what is going on within the company. Each project page lists what information you can share with the public and which information must stay in-house.

 

EL. Do you have separate pages for clients?

 

DS. We have a page for each client that aggregates all of the projects that we have done for that client. You can easily look and see what we have done in the past. You can even see information about discussions we had had with the client. These pages help us with business development activities.

 

EL. How are you handling blogs and wikis?

 

DS. We are on our fifth Wiki system at IDEO. It is simple to use and does much of the work most wikis ask people to do, such as create the navigation. We have more than 15,000 wiki pages. They are the first place where people want to go and to collaborate with their team members around projects and personal interests.

 

We give everyone a blog when they join the company. They can decide whether or not to use it. We also have many group blogs. We get 100s of postings per month to the blogs. The ethnographic research about ourselves that we learned as an email culture has helped to make our blogs popular. In the past, we have had different types of blog systems. In fact, our blogs went through a cycle of ups and downs. Some people would blogging and then stopped because no one was reading the entries. People would stop looking for the blog. We built a small tool called Feedmail which watches the blog for you. Initially, we subscribe you to all of the blogs. You can unsubscribe to the blogs and custom which ones to watch. Each day it generates a HTML email with the images and a short summary of what is in the blog posting for that day. You can click through and read the entire posting or skim the blogs. In a minute you can see what's new on all of the blogs and decide what you want to read. That is where much of the content of projects comes from.

 

EL.  Is there email within your collaboration system?

 

DS. You just click on a link within the system and it opens your email...it is integrated with our email.

 

EL. Do you made any provision to use the Tube as a repository for company documents?

 

DS. We have also a tools section within the Tube that allows us to post a variety of different tools, everything from HR forms, such as health benefits and time cards, and screen sharing tools.

 

EL. How often do you update the Tube?

 

DS. Our internal development team pushes out a new version of the Tube weekly. Each new version contains bug fixes and new features.

 

EL. How would the Tube help me to facilitate putting a project team together?

 

DS. The Tube can help you look at what manpower resources are available to work on a project. If you use a combination of data from our enterprise management system and our time card system, you can see the kind of people who are available for a project within your time frame.

 

EL. Have you opened up a section of the Tube to your clients and do you plan to expand it?

 

DS. Yes, already have a custom section of the Tube opened to our clients. They cannot get confidential information about other clients. They, however, can get access to any work that is happening on their project, such as status reports. In fact, we give them access to all of their information in one place. They don't have to search through their email to find the last update on a project or a report that IDEO showed at a presentation.  It allows us to have a very direct link with our clients and share with them the work that is in progress, such as drawings, illustrations, or storyboards. We can even share videos people we interviewed to get information about the project.  Many clients like this way of interacting, but some clients prefer a more conservative way of sharing information, such as email.  The majority of projects with our clients include some external Web-based tool for collaboration.

 

EL. What can CIOs learn from you folks about collaboration?

 

DS. Like many companies, when we started looking at collaboration, we first looked at the technology piece, especially the dozens of existing tools. Of course, we wanted to see if we could find something that could meet our needs.  We experimented with all of the Web 2.0 tools such as blogs and wikis, social networking sites, telepresence, and video; conferencing. The more we spoke with other consulting companies about their collaboration tools, such as McKinsey & Company, we found the reason why most of these systems do not  meet the expectations of those who buy them. It does not have to do much with the technology as it does with the social network within an organization that wants to drive more collaboration. You need to understand the organization's culture. What are the rules around collaboration?  Do we really encourage it or discourage? Many companies do not look at the motivations that would really provide some benefit for people to collaborate. Unless it really meets some needs people have, you understand those needs and their rewards, then it turn into a system that people will not use.

 

You also need to understand the kinds of concepts you want to share. People carry around much passive, not explicit, knowledge of things. That explains why we decided to create links between people. This proved to be a better alternative than creating a knowledge management to suck information out of peoples' heads, put it in a database, and then download it in their heads.

 

So, the trick consisted of finding the intersection between what motivates people and what is important to the organization. People need to get some benefit from collaborating with the system. Most benefits will vary company by company. It takes a custom system to provide that kind of motivation. People at IDEO really want to express their interests, to share their work, and to be known to other people in the organization. We never told people they must use the system. We designed the system so that it would appeal to people. We then unleashed it, trained people, and watched what happened.

 

EL. What is the key to designing intuitive interfaces?

 

DS. Many systems are not designed to be intuitive. We have tried to do things such as eliminate all of the little roadblocks that make it difficult for people to use the system. For example, we made is very similar to use across every part of the Intranet. We use the Active Directory system. You only log on once. You do not need different passwords for blogs or wikis. For example, special wiki language can cause people to stay away from the system. We have a simple editor in our wiki system.

 

You need to allow people to go where they already are rather forcing them to go to new places. We tried to understand the work processes we have in our collaboration today. We provide ways for people to use the same type of methods but do it in a better more effective. For example, Feedmail brings the blog digest to you via email. Most companies make you go to each blog and search around to find what's new. People waste time searching through dozens of blogs.

 

We built our system to adapt to changes in the environment. To this end, our collaboration system is a constant work in progress. We always look for new ways to improve it. We have a built in feedback system which people can click on a link and send our team a message. We want to find the functions that people want and overcome any barriers to them using it as fully as possible.

 

Our innovative process as a company is based on prototype early, and often. We try to get things out as early as possible as we can get feedback from users. We set the expectation that we will need to change things. I recommend that CIOs do that over time.

 

EL. What has been the payoff from the Tube?

 

DS. It has helped us to understand how we can improve collaboration and use technology to improve our innovation process. It has also helped us to improve our efficiency and our quality of work. It has helped us to generate more revenue because we have been able to attract new types of project outside of our traditional IDEO community.


Elizabeth M. Ferrarini - She is a technology writer from Boston, Massachusetts. Reach her at elizabethferrrini@yahoo.com.

 

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The Internet might have sounded the death knell for print newspapers and magazines in the United States. High quality print media, however, continues to thrive around the world. Developing countries in Eastern Europe and Asia have stepped up their efforts to keep pace with people's demand for print media. In fact, Goss International, a $1.1 billion developer and manufacturer of web offset presses, plans to capitalize on the international appetite for print media, especially newspapers, magazines, catalogs, and advertisement. The Shanghai Electric Corporation recently bought a majority interest in Goss International.  The company also expanded its global business focus through the acquisition of Heidelberg Web Systems in Germany.

 

Goss's presses and finishing systems print everything from books to directories from coupons to advertisements for customers on four continents.  The company sells it presses to large advertising agencies, major metropolitan newspapers, magazine publishers, and major commercial printing companies. Customers include R.H.  Donnelly, KP Group (Russia), AIW Printing (Australia), Segerdahl Corporation (U.S.), and Valpak. (U.S)

 

Founded in 1895, Goss International has become known for aligning technology innovation and product reliability with customers' requirements. Some of the company's technology firsts include the four-color newspaper tower, tele-color remote ink key control, and high-speed circular newspaper inserter. Bill Rogers, Goss International's CIO, says that the company's innovations, such as marrying print with wireless and online access, give advertisers new capabilities. Meanwhile, Rodgers says that the company has begun to apply its engineering expertise to new markets such as wind turbines.

 

Enterpriseleadership.org recently saw down with Rogers to talk about Goss International's process for making technology investments and driving innovation.

 

EL. Can you describe some of the international growth areas Goss is looking at?

 

BR. Prominent families in the U.S. own many of the major metropolitan newspaper. It has been a rough road for them.  U.S. newspapers have been losing advertising dollars to the Web. Several major metros have closed and others have been losing money. The international market for print continues to drive our growth and revenue.

 

We have seen much growth potential in China. It will accelerate once we get passed the current economic situation. Right now about 10 percent of the Chinese population has the discretionary income to buy newspapers and magazines. As that percentage grows, there will more of a demand for not only newspapers but higher quality print products such as magazines.  In fact, Chinese people gather in droves at newspaper viewing stands to read about what's happening around the world.

 

We have customers with global operations in China. They have already started to invest in huge printing facilities that will accommodate about 40 presses. India is another growth area for us. There are about a dozen Indian families that control much of the wealth. A few of those families want to use the same U.S. model of family-owned newspapers. We have customers who have bought many multiples presses within the same family. At this time, the print quality in both China and India cannot compare to that in many parts of Asia or in Europe. We sell presses that are priced for that economy.

 

EL. What distinguishes your presses from your competitors?

 

BR. We do much personalization of print media. For example, we can print catalogues that have specific items for sale or that will go to a specific demographic population. So, instead of one catalog going to an entire group, we can produce a special catalog for 100 or 1,000 people based on their needs.

 

We provide the print system, but we don't provide the demographic data. The customers get the demographic data from database marketing firms. After our press prints the material, it sorts it into books or signatures and then bundles that the books with either twine or in plastic.  If you go to our Web site, you will see a time lapse movie that shows one of our folders that took about three months to build. In 60 seconds, you will see the complexity of handling the folder.

 

EL. What is the challenge of building a printing press, say, to handle a magazine or a newspaper?

 

BR. We engineer everything to the customer's specifications. For example, we configured a printing press to stuff plant see packages in the publication. As a result, we build very few of the same thing. A customer's specifications can be based on geographical needs or physical needs. For a customer that wants to get new technology, but is located in a major metro area, we would fit the new technology to reside within the specified building. In the meantime, we would keep the old press running until we built the new one. Some of our customers have constructed a building just to house the printing press.

 

EL.  Are any two printing presses alike? 

 

BR. No! Some of our low-end presses are very similar. A customer might order six of the exact same thing, but they are engineered to order.

 

EL. Your company has earned a reputation for innovation. Can you talk about some of your technology innovations and the value it provides customers?

 

BR. Goss RSVP is technology that connects a cell phone to a two-dimensional bar code on print material, such as an advertisement. Depending on the cell phone, you can use his or her cell phone to scan the bar code in the ad. You would get a five-digit code to get more information about the product or you could connect to a Web site or see a video. A project we did for a real estate agent allows you to scan a particular house in the ad, put in a short code, and view more information about that house, including a short video. We are ahead of the times. We have designed some of this for the next generation phone that will run on 3G, and eventually 4G. Today we have lots of customer using the SMS part of it.

 

EL. Can you talk about other innovative technologies?

 

BR. Our tagline is 'innovation for business.' We have 1,000s of patents. Many of these patents fall into several areas - reducing labor for the customer, improving print quality, and reducing environmental impact. For example, a few years ago, we developed a technology called gapless printing. It decreases the space between the images or between the pages in the book and thus uses less paper.  By using this technology we have helped customers collectively save about 2.2 million trees over the last 10 years or about 4,300 acres of forest land.

 

EL. What percent of your annual revenue do you spend on product development and innovation?

 

BR. It's about 15 percent. We have sustaining engineering for our older equipment and new engineering for recent products.

 

EL. What process do you follow to make technology investments?

 

BR. All of our major investments are business investments. We do not like to distinguish between investment types, such as technology. The technology team works closely with the business team to develop and conceptualize ideas. We then put together a business case. Depending on the size of it, we might do a pilot. From there, we will develop an appropriation's request with a project plan, benefits, and return on investment.  We will review the request at the quarterly steering committee meeting that I chair.  All of the business leaders from around the world attend that session. We go over the status of major projects and upcoming projects, and anything else people might want to talk about. It is a governance meeting because we have about 15 people in a teleconference at the same time.

 

We also have a technology leadership team comprised of all of the on-site technology leaders. We meet monthly via a conference call for two hours to discuss what we accomplished, what we need to get done, and who needs what help.

 

EL. Are you part of other major investment decisions in the company besides technology?

 

BR. I participate in all decisions about technology, including our computer aided design systems. I also participate in decisions about engineering, marketing, and sales. I have input into decisions about how we support our customers with technology. For example, most of our newer presses have the ability for us to monitor that press remotely and to adjust it remotely. For example, we can adjust the print quality or the speed of the press, or we can look at what is coming off the press. It is like a remote console.

 

EL.  Where does the innovation come from?

 

BR.  We have a research and development group. Because many employees have been with the company for many years, they have solid relationships with each other and the management team. Our innovation comes from the open dialog we have with employees and our customers. For example, I might ignite some of their ideas when I talk about what I have seen at other places or conferences.

 

I have a card that says I am the chief innovation officer.  A colleague recently came to me and said: 'Because you build large, rotating, high reliability devices, have you ever thought about getting into the wind turbine business?' As a result, I have met with executives from wind turbine companies, as well as have attended a few industry conferences. That technology has a deep tie to how we build high quality presses. In fact, some of our presses have been printing the same newspapers for 60 years. Our technology undergoes much stress testing to ensure the reliability of engineering.

 

EL. Are you thinking about having a core of the business in wind turbines?

 

BR. Yes! The manufacturing and design engineering section on our Web site talks about projects we are doing with several wind turbine manufacturing companies. We might never put together a wind turbine and sell it. On the other hand, wind turbines have many components that look similar to those found on a printing press. Both types of components have similar lifecycle and duty requirements.

 

EL. Have you come up with other innovative ideas?

 

BR. Because we have a large service force, we have added some things such as Skype. Our Skype videophone enables our service people to see remotely how a press is operating. For example, if a press is making a loud noise, we can dial into it electronically, but we can't see what is wrong with it. This new device will function as our remote eyes and ears. Service people will be able to transmit video of a customer's press to our engineers in the main office. The engineers can help to speed up the solution to the problem.

 

EL. What marketing challenge does your business face?

 

BR. Our business is based on relationships.  You do not go shopping online for a multimillion dollar printing press. We spend much time educating prospective customers about what we do, how we do it, and why it is better than what our competitors offer. Depending on the price of the press, our sales process can take several years.

 

EL. How do you communicate business impact to your constituents?

 

BR. I came up with a periodic checkpoint meeting comprised of directors and vice presidents from functional areas. We each go over some tactical issues about our area. We also talk about we have accomplished and what we need to improve.

 

EL. Do you attend any meetings of the board of directors?

 

BR. We are privately held. I, however, attend four board meetings a year to talk about technology and innovation. The board presentation package helps me to further understand our strategy.

 

EL. What is your process to revise the corporate strategy?

 

BR. Once a year, the global management team meets. We go through a series of presentations about each site, including any functional areas. Our customers also attend this meeting. Print industry consultants provide us with a three-year vision on where they see the market going.

 

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

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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

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Just about every IT professional at some point in his or her career has run into an IT disaster based on either having to do more with way less, or poor decisions made by senior management. Charles Nault, founder and chair of Atrion, a New England-based systems integrator, can sympathize with these IT professionals. Likewise, during the past 20 years his company has pitched, some of the senior executives who have caused these IT problems for one reason or another. He says that IT problems are more rampant in small to medium -size businesses where CEOs do not understand the strategic value of IT.  He adds that these types of companies are more vulnerable to network downtime than large enterprise companies. Nault, rather than dwell upon what went wrong where, has written a book called Risk-Free Technology: How Small to Medium Businesses Can Stem Huge Losses from Poorly Performing IT Systems.

 

Enterpriseleadership.org sat down with Nault to discuss some of the concepts in his book. Here is what he said:

 

EL. Can you briefly describe Atrion's business model? BTW, how do you market your services?

 

CN. We think of ourselves as a high-end systems integrator. Our business model includes going into companies and establishing a relationship with a C-level executive, preferably the CEO or the COO. Usually, we just see the CIO or an IT director. First, we want to understand everything we can about the company, especially what it does, how it does it, and what tools will help it do better.

 

When it comes to getting new business, we hired a marketing company that sets up C-level appointments for us. We found that it is easier to start at the top and work down the organizational ladder. The marketing firm gets paid if I sit down with the appropriate executive. So far, it has worked well for us.

 

EL. Can you briefly talk about several IT disasters you have run into?

 

CN. We worked with a company that had a good IT team managed by a great IT director. This person totally revamped the network, making it IP based. The company eventually hired a CIO who had his own set of ideas. The CIO and the IT director butted heads with each other. The CIO fired the IT director. Once this happened, the IT staff had rampant turnover. Because the CIO did not like dealing with us, he gave us the boot too.

 

We came across a multi-billion dollar with a pieced-together network. Senior management had a hands-off approach to IT, giving full IT responsibility to the new CIO. This individual had two flaws - incompetent and mostly self-taught about IT. He thought he did the company a favor by buying inexpensive equipment and solutions, and making the network run at the lowest cost possible. That is the so-called value he brought to the company. He failed to do any planning.

 

We came across a hospital CIO whose senior administrators hailed him as its hero for keeping the cost of the new network as low as possible. This CIO apparently went with the lowest bidder for each project. He really did not care about the vendor's credibility, as long as the price was right. Eventually, some of our partners and friendly competitors said they no longer wanted to deal with this CIO because his network was a mess. We tried to sell this CIO some point solutions to correct a few problems, but he would not listen. The CIO's successor had to rebuild the network from scratch. Ironically, the hospital's senior administrators still hold the former CIO in high esteem.

 

EL. The title of your book is Risk-Free Technology. It is possible to achieve this?

CN. The idea of risk-free technology can come about if IT organizations strive to build what I call utility grade networks. This type of network offers peak performance and little, if any, downtime.  Building this network does not happen overnight. You first need to build a rock-solid network infrastructure with enough redundancy and reliability, the appropriate backup strategies, proper documentation, and well-trained and adequate staff. That is just the beginning. You also need support from senior management. You cannot align an ineffective network with the needs of your business.

 

EL. Do small to medium-size companies invest adequately in their network infrastructure?

 

CN. Some do. Here is the issue. Some companies have good IT organizations staffed with people who know that they are doing. They submit propositions and proposals. For example, they do their homework and then propose a good solid architecture.  Unfortunately, someone at the top gets the pen out and starts trimming the IT budget. Before you know it, the IT organization has no choice but to live with an inadequate budget and resources. Eventually senior management gets surprised and angered when the network fails to live up to their expectations. In this type of company, IT management does a good job of planning but often becomes blindsided by slashed projects or shelved projects. In the end, the IT organization might give up on system redundancy or settle for an inadequate service contract.

 

EL. What motivated you to write this book?

 

CN. When I met with the multi-billion dollar company with the pieced together network, I said, 'The CEO cannot possibly know what type of a shoestring his network operates on. If he did, he would not sleep at night.' I also knew it was not my place to call the CEO and throw his CIO under the bus. That scenario became my original motivation. As I started talking with CIOs and IT managers who worked for our customers, I learned that they shared a common frustration: Senior executives, especially CEOs, do not want to know anything except how much does it cost and how can I cut costs. IT organizations in small to medium-size companies suffer from a lack of realistic support from senior management. My other motivation for writing the book included being a champion for these IT professionals who did not get what they needed to do a job, and at the same time, give a wakeup call to those CEOs who paid lip service to IT, not realizing how it could make or break an organization.

 

EL. Will a technology such as cloud computing eliminate some of the networking problems you mention in the book?

 

CN.  It has the potential to do that. If an organization can use hosted applications and those applications come from a solid organization with a secure configuration, then why not. It can reduce some of the problems associated with the server layer and desktop layer. Few companies will be able to relegate all of their applications to the cloud. Even if they could, they would still need a utility grade networking. For example, if your Internet configuration does not include redundant hardware, redundant circuits, and automatic failover, then you will have more trouble than if you had servers on your location. It could become a double edge sword. If you do it right, cloud computing has a ton of potential.

 

EL. Which parts of the IT Infrastructure Library (ITIL) are your customers moving towards?

 

CN. A lag times exist between when you finish the book and the publication date.  Much has changed. I wrote my comments on ITIL during the introduction of version 3 of ITIL. Everyone said that this ITIL version was more condensed and well suited to small to medium-size businesses. Because it was pitched as IT as a service, many of our customers, especially those governed by regulations such as HIPPA and Sarbanes Oxley, peeked under the ITIL v.3 hood. Some of these customers even did version 3 training. Many of our customers have postponed moving forward with version 3 implementations because of the expense. In addition to the training, they usually have the cost of an ITIL consulting firm. In fact, I know of ITIL consulting firms that will not work with small to medium-size companies.

 

EL. What about qualities practices? Do you see Six Sigma or COBIT in your marketplace?

 

CN. I see COBIT more than anything else, even more than ITIL. I, however, tend to see COBIT in larger organizations. I have not seen much of COBIT in smaller organizations. I have seen it at some banking institutions because they need to inject it into their Sarbanes Oxley strategy. If you are financial institution, you need to be compliant with this regulation. You need to look for some type of a documented strategy that enables you to carry out those best practices.

 

EL. Can you discuss how you helped a large company and why it brought you in?

 

CN. I have a presentation called taming the IT beast that touches on a large insurance company with component IT people. Unfortunately, senior management constantly squeezed these folks for money. They had to look first at what equipment cost, not what it did. They did not have adequate staff. Most of all, they did a poor job of writing documentation. We dealt with these people on the fringe. We provided some remote access multiprotocol servers into their network. At the time, we did not have a close working relationship with this organization.

 

One day, we got a frantic call that the company's network went down. Business had stopped completely. No one could log into the network. We did not have much access to the network, except with the remote solution we provided. At the time, this company had many dedicated connections. We tried to do some remote troubleshooting, but we did not get anywhere. At noon, the senior management team sent everyone home and closed the business. Thousands of agents around the country could not do anything that day. We eventually got the problem solved late into that night. Because we solved this problem, the company called us in to do a more formal presentation of our services. The company wanted to know specifically how it could avoid this in the future. We began with 'here is your business today. We need to understand what everyone does each day. This information will get us to the point where we can make the company's IT infrastructure rock solid.' We did that. To this day, this company has not had an unplanned network outage.

 

CN. What takeaways would you give CIOs and CEOs about the business impact of IT versus just keeping the lights on?

EL.  I advocate that companies pull together a technology advisory committee. We did this at Atrion. It involves getting a member of the senior management team to sit at the IT table.  You need to have senior members from IT, as well as leaders from the business units. You also need to have a cross-section of customers, both internal and external, sitting at this table. No way can you isolate yourself from management. If senior management does not want to show up, then you need to work a little harder. Perhaps, you need to do a better job of learning to speak the language of the business.  Do you really know what the CEO and CFO consider important? Ask to sit in on the meetings other departments have.  Observe what people say; refrain from talking about IT. Learn all about the business, both from both an internal and external market perspective. Acquiring this type of knowledge will help you to know how IT can have a better impact on the business objective.

 

Remember, IT is nothing more than a means to an ends. You need to learn what the ends are. Finally, you need to have a razor focus on effective networking. For example, in my book I reference Cisco's study about people who try to do alignment with networks that are not utility grade. The study found that you create more problems that way. Making the network infrastructure rock solid includes an initial investment in redundancy, appropriate backup strategies, and the proper documentation. Once you make this investment, you will end up cutting IT costs in the long run. You will also gain more efficiency.

 

EL. What are you looking for in IT talent?

 

CN.  We want IT people who possess integrity and humility. I say this because they must know how to function as part of a team environment. We have made the mistake of hiring people with a tremendous amount of technical expertise, including the ego to go with it. These characteristics can prove devastating to the entire team. We can spot these people right away. Ego does not work. Next, we look for the core competencies. The IT professional has given way to specialties, such as networking or security. To this end, we look for people with current certifications in specific areas of IT, such as Cisco or Microsoft.

 

We also look for a specialty area, such as security, routing and switching, or storage. We offer an on-going program so our IT professionals can keep their certifications current.  Some IT folks function as jacks of all trades. We prefer people who have mastered a specific area. We also look for people who have exceptional communication skills. They need to be able to talk in technical terms to their peers and in plain English to non-technical folks. The latter capability is harder one to find.

 

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

 

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If you ask some C-level executives what they might do after they retire, you could hear something like, "I've thought about writing a book which chronicles what I learned running a major company." Unfortunately, few CEOs write management books after they retire. Furthermore, it's rare to find a senior executive who has written one while he or she is still actively on the job. Bob Seelert, the chairman of Saatachi & Saatchi, one of the world's largest advertising companies, is that rare kind of executive. He is one of the most insightful executives to emerge in this troubled business landscape. His new book, Start with the Answer, is a back-to-basics primer for anyone in a leadership capacity.

 

Seelert has been with Saatchi & Saatchi since 2003. After graduating from Harvard Business School, Seelert spent the next 23 years with General Foods Corp. where he eventually became CEO of Worldwide Coffee and International Foods. He closely observed one of the largest mega-mergers in United States' corporate history - Philip Morris's acquisition of General Foods. His career also included leading the turnaround of Topco, a grocery industry co-operative, and Kayser -Roth Corp., a leading U.S. manufacturer of leg wear.

 

Enterpriseleadership.org recently sat down with Seelert to talk about the management challenges CEOs, as well as other C-level executives, face dealing with the economic downturn.

 

EL. Why did you decide to write this book?

 

BS. A creative person at Saatchi & Saatchi told me that my wisdom set me apart from other executives he had known. After he said that, I got to thinking that, in fact, I dispense advice, council, and perspective. It's based on my collective experience. Perhaps, I know quite a bit about many things. I decided to put down the wisdom I have collected over a career that spans five different companies and 40 plus years.

 

The book consists of a series of easy-to-understand points about things that can lead to success in your career and high performance in companies. My book is drawn both from business and my life. You can pick up this book, read a few sections, and then put it down. It is biblical in that sense. That's the one comment I hear frequently.

 

EL. What are the three top lessons you learned as a CEO?

 

BS. Leadership begins at the top. Having the right person in the CEO seat can make all of the difference for a company. You can cascade that down the organization as well. Next, you always have to be open, honest, and candid and get a straight forward assessment of the facts. Some times the truth can be pretty ugly. Until you get it on the table, you are not in a position to deal with it. Unfortunately, many people do not look down the pike at the truth. It is one of the reasons they don't make progress. Throughout the book I adopted the predominant philosophy which became the book's title - Start with the Answer.  Before you go off and spend much time and money, you have to assess all of the facts about where you want this to end up. In essence, if you start with the answer, then you are in a position to work your way back to the solution.

 

EL. According to industry consulting firms, such as Gartner Group, the average CEO tenure is about four years. Why is CEO turnaround so high?

 

BS. In some cases, you may have the wrong person. He or she may not have the right vision for the company. Also this person may or may not have established the right standards of the performance expectations and may or may not have delivered against what he or she had initially proposed. He or she may or may not have unleashed the energy in the company for building the right kind of rapport and relationships with all of the employees. Impatience heightens all of these things. In this short-time world, others judge executives by what have you done for me lately? You have to deliver against what you said you would do. It's a combination of factors.

 

EL. What challenges do CEOs face in this economic downturn?

 

BS. They are coming under more pressure now. This is the most challenging environment that businesses have faced in decades. A recent article I wrote about leading in tough times lists the 10 things you need to do to lead successfully. First, you need to get the truth on the table. Make sure you start with a good cold heart assessment of the facts. Second you need to establish the right kind of standards for the new reality. You can establish a performance expectation in terms of how you will perform relative to the market.

 

At Saatchi & Saatchi, we do not know how far off the media environment will fall. We know that we want to beat whatever happens by 50 percent. That is a relatively high expectation in an assured market sense. We want to use this as an opportunity to grow our share of the market. Others include the following: Think long term but act short term. Communicate, communicate, and communicate. Do whatever it takes to get in front of your people to reassure them that you are going to lead the company to see a better day. Tough times call for extraordinary efforts by everyone in the company. Get with your customers to see how their needs are changing and how to best respond to those needs.

 

EL. What companies do you most admire and why?

 

BS. I admire the leadership of Toyota and Procter & Gamble. Toyota has done a good job of driving innovation and making continuous improvements. Even through automobile sales have fallen, Toyota has continued to add enhancements to the third generation Prius. In fact, some auto manufacturers do not even offer a hybrid. Toyota's new Venza fills a gap this company had in the market. Toyota continues to stay true to its long-terms goals of innovation and continuous improvement. Meanwhile, Procter & Gamble has reframed the value of some products to better fit the economic environment. For example, it has introduced a low-cost version of Tide. The company reminds people that Tide will help them keep their new clothes looking that way longer. This feature and benefit appeals to consumers in this type of environment.

 

EL. So what type of a balancing act do CEOs need to do in this environment?

 

BS. Despite the rough times, you have to add some people and create some new capabilities. Whenever you add people, however, you need to look at where you can reduce. Adding a new capability also means thinking how you can eliminate something you no longer need. You need to make tradeoffs in this kind of tight environment. To pay for the additional staff and capabilities, you need to think about the reductions and the elimination.

 

EL. As the CEO of a major advertising company, are you seeing your business evolving more to social media?

 

BS. Absolutely! Our world has moved from talking to people to building connections with them. We want to create information that is useful in peoples' lives so our clients will be invited in their homes.

 

EL. Can you briefly describe some of the technology trends you have seen in your career?

 

BS. When I worked at General Foods and Philip Morris, hardware and a centralized IT environment dominated the company landscape. Today, we can disburse software applications so they are closer to meeting the needs of disparate, decentralized entities. People at Saatchi & Saatchi not only need to understand technology, but to understand how it affects the way they access information, the way they lives their lives, and the way they make decisions. We have various centers of expertise that touch all of these things. You need to embed these things in every operating unit today. You cannot have a periodic get together with some center of expertise that tells you about this that and the other thing. You need to be living these things on a day-in and day-out basis.

 

EL. You prefer to talk about corporate dream as opposed to operate vision. Is that something that can be applicable to any company?

 

BS. It can be and should be. I have a story in the book called Tape Your Strategy to Your Forehead. There is a big difference between a dream and many mission statements. You should be able to express your dream in 20 words or less. People should be able to tape it to their forehead. You see a lot of vision and mission statements that go on and on. People do not have a way to quickly state back to what is this company all about. When I did the turnaround for Kayser-Roth Corp., we said our dream was to become the best leg wear company by meeting customer needs better and faster than competition through total quality. It is 20 words. It said this is what the company is all about. At Saatchi & Saatchi we want to be revered as the top house for world changing ideas to create sustainable growth for our clients. This is a pithy, meaningful statement. We expect everyone in the company to take this forward and know what the company is about. This kind of thinking energizes every employee.

 

EL. When you were at General Foods, the company went from a centralized to a decentralized structure during the acquisition by Philip Morris. How did you deal with the CEO so everything was harmonious?

 

BS. In the book I say that centralization and decentralization can be the nitroglycerin of organizations. Individually they are fine. However, together they can create some real problems. You need to be one or the other. One company highly centralized, while the other one was highly decentralized. It just never got to be a happy marriage. There was no way to bridge that kind of gap. General Foods was a matrix organization with many centralized resources, such as IT. We had ways of cross roughing them with the line organizations to get out of the decentralized needs of the various businesses. Centralization ends up often times being a one-size-fits-all environment. It is a difficult approach when your business comprised of an entire bunch of disparate business with no relationship to each other.

 

EL. What is your organizational structure at Saatchi & Saatchi?

 

BS.  We are disbursed geographically across 83 countries. In some areas we deal with affiliates. We have an entire series of company beliefs that we distribute around the globe. We start with our inspirational dream ad. Our local management and applications are highly decentralized. We will give them the beliefs, values and principals. The applications and the plans are in the hands of local managers.

 

EL. Can you describe the differences in the strategy process at the companies where you were CEO?

 

BS. General Foods had an intensive strategic planning process. In fact, it could drag on for a year and wind up being a three-inch thick book.  By the time it got done, it was time to start the next strategic planning process. At Saatchi & Saatchi, we have the entire thing down to a single page that tells you everything you need to know about our strategic direction. Most companies will never get to that type of an environment because spend too much time strategizing about the future. Instead, they should spend more time thinking about it and making it happen.

We operate on two types of beliefs - 'one team, one dream' and 'nothing is impossible.' We have an entire series of beliefs and character statement. We have the challenge to become the agency of the year in every market in which we operate. Our organizational focus includes filling the world with love marks, which is a strategy to elevate brand to customer loyalty and beyond.  We can put all of this stuff on one piece of paper.

 

The next thing we do is to put together an annual plan. We try to cascade what we call our 100-day plans throughout the company. It consists of the half dozen things you want to get done in the next 100 days. If you knock those things off, you get your next 100 days. That makes up a year.

 

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

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These days generics are the hottest growth market in the pharmaceutical industry. And Ranbaxy Laboratories Limited ranks as one of the eighth largest generics producers in the world. With annual revenue of about $1.7 billion, Ranbaxy offers generic drugs that cover the majority of chronic and acute segments. The company sells in 125 countries and has a physical presence in 49 countries. It also distributes about 80 percent of its products through the three top pharmaceutical distributors: AmerisourceBergen, Cardinal Health, and McKesson. Emphasis on new drug research into areas such as metabolic diseases, oncology, and urology help distinguish Ranbaxy from its global competitors.

 

Several years ago Ranbaxy underwent a business transformation to do a better job of carrying out its mission deliver value everyday to customers. This transformation included making sizable technology investments so Ranbaxy could both accelerate and lower the cost of bringing new products to market, and streamline the process of developing new chemicals and new chemical entities. The results paid off for Ranbaxy. In early 2009 Ranbaxy became an operating company of Daiichi Sankyo, an $8 billion global manufacturer of branded pharmaceuticals and the 15th largest company in this marketplace.

 

Enterpriseleadership.org recently sat down with David Briskman, Ranbaxy's chief information officer, to talk about the strategic integration of technology to better enable the company's key business processes.

 

EL. Can you describe the structure of your technology organization?

 

DB. We have a centralized technology organization comprised of both internal technology staff members and outsource partners in about 30 countries. Most of our applications, technology support, and our governance process follow a centralized model. Our key technology areas include the following research and development, drug discovery, and manufacturing technology.

 

EL. How will your business model change because of the Daiichi Sankyo relationship?

 

DB. Daiichi Sankyo ranks number 15 globally in branded drugs. We plan to follow a hybrid global business model that combines generics and the branded drug globally.  Our growth opportunities will include leveraging our capabilities with those of our parent.

 

EL. I read that your CEO wants to use technology to drive business transformation. Can you describe the areas where technology provides the most strategic value to the company?

 

DB. Developing a molecule that falls into the multimillion-dollar drug segment, and keeping that intellectual property for years have driven the traditional branded drug market. In the generic market, you have to be very efficient as possible if you want your business to thrive and to be successful. It is a highly competitive business, much like private label, consumer packaged goods. You have to produce a very good basket of goods or else you will not be successful. For us to accomplish this goal, we depend of technology to support our three key business cycles. One key cycle includes moving the product form the research and development cycle to the filing and registration and finally delivery to a particular market.  Our supply chain, another cycle, needs to be incredibly efficient, given our product diversity.

Our third cycle looks at how we run our business. For example, we market directly to doctors in India where customer intimacy is less of a focus. For the rest of the world, our business growth opportunities depend consistently on delivering a good quality selection of diverse products.

EL. Can you describe some of the key technology investments you made to improve the business cycles you mentioned?

 

DB. We have moved our research and development for new products from a manual process to a highly automated one. We submit all documentation electronically to the U.S. regulatory authority using a specific format. We are one of the early adopters on that technology. It has enabled us to obtain faster approvals on the submissions and subsequently to bring faster products to market. We also have deployed our global regulatory database that allows for our tracking, monitoring, and managing of all our regulatory submissions. This database has facilitated our ability to look at our product suite in a more meaningful way. Before this database, we had to figure out what we registered across all of the products in all of our markets.

 

We invested very heavily in business intelligence and our SAP supply chain suite. In fact, a variety of our business intelligence initiatives focus on enabling the business to respond better to customer demand. Some of those areas include everything from mobile phone-based automation tools in India to the different data mining, and dashboard tools.

 

EL. What changes did you make to your enterprise architecture for some of the things you mentioned?

 

DB. Because we have to be efficient, we prefer not to dabble in lots of different technologies. We have a different architecture and set of applications in research and development. Our enterprise architecture, however, revolves around our supply chain backbone and our Microsoft capabilities. We try to leverage these two platforms.  Our current enterprise architecture is less than ideal on the sales force automation front.

 

EL. Can you describe how you are handling sales force automation to make your organization efficient?

 

DB. We have 17 different sales force automation systems. That might sound like an inefficient number of systems. On the other hand, this number of systems complements the way we operate geographically. We have different business models for certain countries. Most of the business advantage does not come from the architecture of a given system, but from the local market intelligence available on those sales force automation systems. Our global studies show that we are far more effective growing our business with our regional and local players versus an enterprise approach to sale force automation.

 

EL.What is your governance process for making these investments?

 

DB. We have both formal and informal governance for making technology investments.  Our formal governance process is very straightforward. I sit on both the budget committee and the operating committee.

 

Each year we go through a very rigorous assessment based on a value framework we adopted from Gartner. It accesses all of the different technology investments to do a multi-cycle review process.

 

Throughout the year we have councils comprised of leaders from the different business areas. These councils also include my direct reports and me. We meet quarterly to assess the amount of progress we have made against the specific plan. These business councils provide a formal structure for what we must work on, along with any unexpected projects.  Depending on the region and business function, a business council might have as many as 25 people sitting around the board room to an informal gathering of five people.

 

Most technology projects have steering teams, which comprise our informal governance process. These teams include mostly technology professionals and some representatives from the business units. Together they work with the different business leaders to understand their priorities, vision, and strategies beyond that quarter.

 

EL. How will your governance process change because of Daiichi Sankyo?

 

DB. The governance model going will grow because of our relationship with Daiichi Sankyo. We have made most of the strategic investments and put in place the platforms that enable our generic business to run efficiently on a global basis. The exciting opportunity for me is the ability to extend that efficiency to our parent.

 

EL. Do you link technology to new sources of revenues, new products, or new improved processes?

 

DB. We rank all of our technology investments on this value framework. The framework's four areas include the following: financial metrics such as ROI, strategic implementation, compliance, and feasibility. The last one involves the ability of our business to take advantage of an implementation.

 

I produce an annual report that quantifies the business value associated with each investment. We have been through several cycles on this. In the first year we used this value framework, we focused on ROI. I found that we spent too much time trying to quantify dollar values where we should have been looking at qualitative capabilities.

 

We can say that our new supply chain platform drove our inventory reduction, but other factors contributed to this reduction.  We make sure we can have quantifiable metrics associated with each project. For example, pharmacovigilance is the compliance process for tracking adverse events in drugs used by patients. We do not put a financial benefit on that system per se, but we have started to improve the timeliness of our regulatory reporting.

 

By focusing on the metrics directly attributable to the investments, we have improved the overall perception of the investment's value. For example, for many of the dashboard and collaboration platforms we have set up, we measure efficiency factors, such as how many reports we run and how many active users we have. We prefer to do it this way rather than this particular report helped us improve revenue by so much. That type of process leads to much interpretative discussions and in turn does not lend credibility to technology. By focusing on the business capabilities we provide, we will derive a perceived value from the knowledge we provide with those capabilities.

 

EL. How integrated is technology into your business?

 

DB. It is integrated into the business on several levels - as a centrally managed function and as a strategic driver. We have moved from the perception of being help desk order takers to playing a strategic role in the business. We have become more proactive in our ability to propose business changes and technology investments that will improve the business.

 

This year my team is leading a project sponsored by our CFO to streamline the financial close process. We are in partnership mode on this project. The same goes of our sales force automation and CRM efforts. We have taken a more strategic stance in bringing solutions to the business and suggesting changes to business operations. For example, we worked on how we could improve our customer management process in India.

 

EL. What is your process for reviewing the corporate strategy? How will change because of the Daiichi Sankyo relationship?

 

DB. We have been on a three-year cycle for reviewing and setting our corporate strategy. Our relationship with Daiichi Sankyo, however, will influence how we look at our corporate strategy. I told my team that we do not have to sit down every few years and figure out our corporate strategy and alignment for generics. Instead, we need to get as many good quality products to market and to make sure we deliver them in a timely and efficient fashion. We also have to accomplish this in a compliant and profitable manner.

 

The generic drug industry is very simple. We support the industry's best practice for new drug development. As our business model evolves with Daiichi Sankyo, we will move forward to leverage our cost advantage in the global branded pharmaceutical market too. Many of our competitors have a federated business model versus our forthcoming centrally controlled business model.

 

EL. How has the global economy affected your business?

 

DB. Before 2009, we had been growing at 12 percent per year. Our growth rate is now about six percent. The global economic downturn affects about 10 percent of our business. We have refocused our efforts on becoming more efficient by enabling the appropriate technology and business process to achieve productivity. It has also helped us to leverage and to stick to carrying out more standard policies and procedures that facilitate productivity. For example, we rolled out unified communications and IP telephony to the increase the use of collaboration technologies.

 

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

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When Ralph Szygenda joined General Motors as CIO in 1996, the automaker was one of the largest, most diversified corporations in the country. However, the IT organization was at an all time low. GM had just unleashed EDS, the IT outsourcing organization. Szygenda says, “There were about 20 of us left in the company who knew anything about IT. EDS did everything. We had to start from scratch to rebuild IT.”  Thus began Szygenda’s legendary career to become the global CIOs most CIOs want to emulate. He and his team began to build what would become the world’s largest outsourced IT organization. He says, “We consolidated endless numbers of systems, applications, networks, and processes.” Under Sygenda’s leadership IT’s focus shifted from systems to cars, customers, and innovations, such as OnStar. GM emerged as a global business, especially becoming the number one automaker in emerging markets such as China.   Now things are different. Szygenda retired on October 1, 2009, as GM emerges from bankruptcy to become a more focused, leaner automaker. He says, “Now the entire company can focus on getting closer to its cars and customers. ”   A month before he retired, Enterpriseleadership.org had the pleasure of sitting down with Szygenda to talk about how the role of IT changed the company, how GM plans to deal with some of its operational issues outside of IT, and what changes we might see for  the IT organization.  Here is what he had to say:

 

EL. Because of the bankruptcy, how did the company's business strategy changed? 

 

RS. Clearly, it is still in development. A couple of things happened. The bankruptcy took away many of GM 's decades old legacy problems. More management time went into legacy, healthcare cost, and Delphi, a bankrupt automotive supplier spinoff from GM. We had to give Delphi more money than anticipated to keep it alive because of its criticality to our supply chain. GMAC, the financial services business, has also gone away. Our strategy is to concentrate and make time for our customers. That is what a car company really should be doing. It gives us an opportunity to do this without many of the legacy issues we had in the past.  


EL. What changes have you made or plan to make to the IT organization and how will these changes affect the outsourcing partners? 

 

RS. Not a significant amount! I believe in the IT organization shadowing or mirroring the structure of the business. It goes for any company. As GM restructures and changes how it runs its international operations, the IT organization also changes to adapt to that particular area. Our base strategy remains the same -- to use process information officers (PIOs) as well as CIOs. These people drive the common elements of product development, manufacturing, or supply chain across the company. That strategy or that direction for an organization issue will probably stay in place. 


EL. Do you still have the same number of outsourcing partners? 

 

RS. During my past 13 years here, we have reduced the number of suppliers to less than 20 key IT suppliers. That number includes all of the product companies, such as Microsoft, Oracle, and Cisco, as well as services company, such as IBM, HP, Capgemini, and Wipro. We have mostly service providers along with both hardware and software product suppliers.   From an IT viewpoint, we run our sophisticated model of buying and brokering IT. We have 1,000 people inside the company that have the responsibility to design the business direction and the acquisition of IT.  


EL. How will the IT budget change and what new IT investments do you plan to make because of the restructuring? 

 

RS. IT cost will bottom out this year. It has been difficult because of the bankruptcy and the conservation of cash. We have reduced cost every year for the past 13 years through efficiency. In other words, we have taken cost out of the operating side of the IT business and put it back into development of new capabilities and application. This year that figure has been lower than what it has been because of the bankruptcy. It will start to go up again because we cut it very severely this year. So going into next year, we will put more money into innovation as the business changes the particular processes where it wants to go. 

 

EL. Can you describe the investments you made over the years that have really paid off? 

 

RS. Twelve years ago, this company operated very decentralized with autonomous business units. Today the company runs the common processes for product development, supply chain, and manufacturing the exact same way throughout the world using this exact same technology, saving a significant amount of money and permitting great speed for product development. For example, 12 years ago, we had 23 computer aided design systems. Today we have one. We cut the product development cycle time by more than 50 percent. We have approximately 30,000 design engineers around the world using this same technology. People on different continents can work in parallel to design together. We move eight million vehicles throughout the world using the same supply chain systems. We purchased $90 billion dollars of services and materials using the same purchasing systems throughout the world. We deliver just in time to plants and manufacturing facilities across the company.   OnStar is another example. We have five million customers using that technology in vehicles. It saves many people's lives. We can diagnose vehicles and tell our customers all through technology that they have an issue. If they have an accident, we can notify emergency resources through satellite systems linked to our call centers. We can stop stolen vehicles automatically if the police officer wants to bring the vehicle to a halt. The person driving is in trouble. All that includes technology changes that have occurred in the company over time.   At the same time, we have saved significant IT dollars through efficiency. In fact, we have reduced billions of dollars. At one time, we had 7,000 IT systems. Today, we have about 1,500 systems taking out billions of dollars of costs, and moving from autonomous businesses to very common business There have been significant changes in the business. 


EL. Can you describe the current governance process for making technology investments? 

 

RS. We have CIOs for the major business units in the company. Given the company's global size, 14 years ago we created the role of process PIOs or experts in business direction. For example, we have a business PIO in change of the entire product development process, from concept to actual vehicle development. We have another PIO who handles all manufacturing processes throughout the company. Another one has the supply chain. They drive initiatives across the entire company by doing two things: trying to put together and analyze the business needs, and driving the strategic direction with the business leaders on defining the most important requirements to transform the business.   Every year we do a portfolio process where we analyze those needs coming from the business PIOs, such as the PIO for product development. In this case, we would work with an IT project management officer to see what the company needs. We also do a comparative analysis or a competitive assessment of all of our competitors each year. Next, we take all of the particular IT requirements we need to do and we rank from one to 60. We go back and socialize with the business leaders, come back in, and ask senior management in the company to evaluate how we should proceed. This occurs every year through a pretty detailed portfolio process for the company.  It's unclear whether we will modify this process. I don't think it will happen totally. It is business driven, kind of a ROI investment area. We look at ROI in two areas -- one is analytical based on cost savings, and the other one is intuitive based on what we think we need to do. We look at business ROI, which includes IT. We do not do independent IT, except for running the computer center, or telecommunications, I don't expect a significant difference because the process has worked successfully over time.   GM's major issues revolve abound legacy cost issues of not having the right products for the marketplace. It is a global process around the company. I'm not sure anyone will say there is an issue with that. We had a 40 percent reduction in the marketplace of sales, which cash could not overcome.   


EL. How do you categorize the technology investments?Do you look at what is innovation or what is explorative? 

 

RS. I have a strategy manager who works across the entire portfolio process. Under those areas, we have clearly new process transformations, which include strategic area changes in the portfolio. Then we have, what I call, more tactical new product launches in the company that need IT investment, such as regulatory or initiatives to keep the business running.  Next, we have strategic business process transformations. For example, we have different regulatory requirements in Russia and in China. We have to meet all of those. We have new product launches every year because the vehicle designs change. Here we might need more leading-edge technology. We might experiment with new IT in areas where we see how they would adapt to GM from that perspective.  


EL. Are you going to make any changes to the way you measure your technology investments? 

 

RS. It is solid ROI with a total business appropriation request.  Any major changes must link with the business for measuring a business change. You can't get much better than that. On the other hand, the intuitive side is very difficult to measure. For example, how do you evaluate every new change to a new HR system?  Some of that is intuitive. I am not sure we will change that. We will change the business's end goal to focus more of customers and the cars. We will drive a different perspective from more customer-oriented systems, more product information gathering, and new ways to communicate with the customer. We will drive more investment in those areas. The IT process will not change.  The business needs will tend to tilt and change more toward the customer, the vehicle design, and the need to meet the market needs.  

 

EL. Have your expectations of your internal staff changed? 

 

RS. This organization has always been very aggressive. Most of the people on the senior IT leadership team have come from outside GM. As a result, they have had different mindsets, and difference experiences over time. The overall IT speed of the company will accelerate. We will have to deliver our requirements faster. Our IT people view this as a positive move. However, they will be under greater pressure, along with the IT suppliers, to deliver quickly on these requirements.  


EL. Can you describe your growth in foreign markets?

 

RS. Ten years ago, we were not in China. Today, we rank as the number one automaker there. If you look at the new emerging markets, GM has done quite well there because it did not have the legacy area. People say, 'How can GM be a leader in China and still have all of legacy problems and then go bankrupt in the U.S.?' We did not have the legacy cost issues outside of the U.S. I appointed an emerging market head who makes sure we address those markets from an IT perspective very quickly. 


EL. Is GM looking to move OnStar into new markets such as healthcare? 

 

RS.  Coming out of bankruptcy, we must concentrate on the core automotive businesses and nothing else. GM has a long history of being in all types of businesses, everything from heating and cooling to owning Hughes Corporation. In fact, we owned EDS when I joined the company. Diversification is not one of goals right now.   OnStar plays a key role in the insurance industry. We understand, as well as provide, all of the internal analysis of the vehicle electronically. For example, an insurance company might say, 'We will sell you insurance on the miles driven.' This information automatically feeds the insurance company. It is paid per usage. We are doing some of these things.   For the government, we can monitor vehicles with OnStar. We know which vehicles have evacuated from a hurricane. We can tell how many people are on the highways. We immediately work with government agencies to give them that input.   We leverage the fact that the vehicle acts as another node on the IT network. This leveraging helps us to use OnStar for online navigation and information you want. Many businesses have wrapped themselves around that. One example includes directing people to restaurants. There will be more of that. The killer application will always be safety and security followed by navigation. It is hard to find applications that may be extremely successful after that. It is a new territory for innovation.  Today OnStar has no direct similar competitors. We have about five million customers. Other companies install tracking devices into cars after they are built. No other competitor builds a system like OnStar directly into the vehicle. If there is something wrong with my vehicle, I get a diagnosis via email.  

 

EL. What is IT doing to drive innovation within the company?

 

RS. For a long time, IT has have been transforming all of these business processes, and transforming the technology in the vehicle, though innovations such as OnStar. We are taking that process to other parts of the world. The processes in the company for product development and manufacturing are very good. They will not affect GM's ability to compete in the automotive business. This is a fashion business. You need the right car or truck to meet customers' needs. These needs could include energy efficiency, comfort, or reliability.  Ten years ago, IT was fragmented or spread across the world. For example, within 10 years, we have gone to no presence in China to being number one using IT. This is a nice success story. GM also uses more social media than any other company. We have been into blogging for years. We have experience with Second Life. We will see more of that.   The next generation of technology will offer more transparency to customers, letting then know everything about our products and our company. Our next move includes making sure GM has the speed it needs to transform after the bankruptcy. Our legacy issues are gone.   GM had two issues -- legacy cost which was a major driver and the 40 percent drop off the marketplace. You can see right now with the Cash for Clunkers how many people are buying cars because of the stimulus.  IT has never been an issue for IT. If you talk to any members of the executive team today, they will tell you the same thing. I am not sure that executive leaders in other companies would say that IT does what I need it to do.


EL. What was the genesis for GM's major outsourcing of IT? 

 

RS. When I joined the company, IT was decentralized. It offered mediocre processes.We inherited outsourcing when GM spun off from EDS. We had to make it work. In 1996, we were the largest corporation in the world. About 20 people who knew something about IT remained with the company. EDS handled everything else. We had to make it to work.  Industry analyst reports say that 70 percent of all enterprise IT includes acquired services through some form of outsourcing. It is a way of life. We did it way before our time. We have done it pretty well. It has allowed us to move quickly. We did not have to worry about having all of those internal people and assets in the company and trying to make it leaner. We could never have moved that fast with technology. The Internet also enabled us to redesign all of the interfaces, whether it is to the supplier, or dealer using the Internet. If we had to do that from a hard-coded environment, it would have taken us a decade or more. It took us three years. 

 

EL. Can you give me some examples of IT firsts at GM? 

 

RS. We were the first one in California to display customer info versus going through a dealership 10 years ago. We were the first one to interface with a supplier base. We had 1,000 of suppliers at that time we were buying $100 billion of materials and services. We did all of that online. Meanwhile, the rest of GM was encumbered by speed in areas such as production. Within three years, IT helped transform GM. IT will not keep GM from being successful. Instead, it will be whether or not this company can meet customers' needs with the right products fast enough. The perception quality problems have taken decades to fade away. Most people believe we have good products and want the U.S. auto industry to succeed. The entire American car industry still has a perception issue that will linger for a few more years.  That will occur in the next couple of year.

 

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

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After 20 years as an IT executive, including CIO, at Capital One's Financial Services division, Doug Moran decided it was time to do what he really loved - coaching and  leadership development. Moran's tenure at Capital One focused on getting his team to work with business partners to achieve business impact of IT. They carried out technology solutions and the integration of disparate technologies from numerous  acquisitions. Some of the projects had budgets up to $100 million. He admits that on occasion his goal of achieving business impact of IT took a backseat to the politics of being a CIO. Along the way, he spent much time mentoring his direct reports and other leaders. Before joining Capital One, he served as the Deputy Secretary of Health and Human Resources, Deputy Commissioner of Social Services, and Telecommunications Director for the  Commonwealth of Virginia. He began his career at Verizon.


Moran's new company, If You Will Lead, LLC, is a leadership consultancy focusing on executive coaching, executive development, and  infrastructure strategy. His forthcoming book is called, If You Will Lead: Enduring Wisdom for 21st-Century Leaders. He serves on the boards of the Virginia Children's Health Insurance Program Advisory Commission and the Better Housing Coalition.


Enterpriseleadership.org recently sat down with him to discuss the challenges of carrying out the business impact of IT and the need to mentor subordinates. Here is what he had to say:

 

EL. What does business impact of IT mean to you?

 

DM. The president of the  division that I was CIO for put everything in perspective for me when he said, 'IT isn't an overhead function. It's  essential to our operations. It's core to who we are.' His words were a sign that I made a difference in how our business leaders thought about IT.

 

It seems self-evident that if you cannot justify the business value or the business impact of IT, you shouldn't be doing it. Before I became a divisional CIO at Capital One, I was a business information officer. During my first leadership meeting as BIO, my new boss said that he expected me to think and act as a business leader. He went on to say that if I was just going to be an IT professional, he didn't want me to stay. He expected me to be able to describe the problems in business terms, not technical terms. He still expected me to be competent in technology.

 

When I acted as a member of his leadership team, I had to act as a business leader with a technology bent not the other way around. That view stuck with me for my entire time at Captial One. At the end of the day, you need to be able to quantify IT. Too many technology leaders focus on the attractiveness and the excitement of the latest toy, as opposed to the business value we must deliver.

 

EL. Can you give a couple of examples of how you created and quantified business value of IT?

 

DM. A good example is in that business group I mentioned. When I got there, I looked at the list of projects for the IT organization. I immediately cut the number of projects down to a manageable size. At the top of the list, we had a large project to deliver a new capability that would require  outsourcing  to a new vendor. We spent a lot  of time talking about this effort to the business. We started looking at the business case. The project was an idea that many people wanted to do, but we could not quantify the value.   We decided to shut it down rather than take the risk and waste significant time and money. The value we brought was avoiding a huge investment that offered questionable value for the organization. This enabled us to focus on higher value projects.  This reinforced that my role was not just about delivery new capabilities.  IT was also about managing risk.

 

Before I left Capital One, I worked on replacing our lending platform. The acquisition of a couple of different banks gave us the challenge of how to deal with different platforms all doing the same thing. We said, 'Here is what it costs today. Here it what it is going to cost if we continue to operate with these disparate systems. It’s not just  the hard cost of running them, but the missed opportunity of an  integrated  customer experience.' We put together a compelling case and wound up replacing the system  three years before we had intended. We showed that this effort made  sense. It was controversial. It required the business to go through  change that itt did not want to embrace.

 

EL How did you communicate business impact of IT to your constituents?

 

DM. We used their language or terms to build a business case that was grounded in the business metrics that the business unit valued. We had regular meetings. Each of the CIOs who reported to me had to become an integral part of the business they served. They were at the table, attending all of the meetings. They had to work closely with our business partners to help them understand all of the issues. When it came right down to it, my team's job was to learn the problems the business was experiencing and be part of solving them. There were the natural business things that occurred. When we got together to figure out what we wanted to do, we would have meetings to prioritize and make sure we got access to the technology professionals we needed to solve the problems.

 

EL. Did you handle the politics of being a CIO?

 

DM. I tried to minimized the politics by keeping the end game in mind. If you deliver business value, then the politics can work themselves out. Often politics become an excuse to   rationalizef why certain projects cannot get done. On occasion, I would run into that problem, and I would fall back into that excuse saying,, 'It's the politics of the systems that keeping mefrom getting the resources I need.’ The fact was, I could not make the case for showing what I needed to get done was more important than other people's projects.' I have spent much time looking back at what went well and what did not go so well. I often blamed others for not getting everything done. In a most cases, I had not done the best job of figuring out how to put the most compelling case before the appropriate stakeholders.

 

EL. As a CIO, what did you look for in staff?

 

DM. I looked for people with a good work ethic, and strong technical skills. Capital One has a culture of rigorous testing and assessment. We did much screening before we hired anyone. As a result, I knew that the people I interviewed had made it through a tough  process. I also looked at peoples' creative abilities and willingness to think about problems in business terms, not as a technologist. I wanted my direct reports to be very business savvy.

 

EL. Did you do any type of mentoring to help your staff improve the raw skills you were looking for?

 

DM. I am a great believer in mentoring. Capital One invested much money in enterprise training. I invested much of my time in mentoring and developing leaders on my team. The love of mentoring inspired me to set up my company. Of all the things I have done, mentoring and coaching made me the happiest.

 

EL. Are you glad you are longer a CIO in an organization?

 

DM. I am glad to be doing what I am doing. I loved being a CIO. At times, it frustrated me. At the same time, I found it to be very rewarding. Unfortunately, my role became too administrative, where I focused more on making sure that the businesses underneath me did things correctly, as opposed to being a thought leader and driving business.

 

EL. Can you describe your forthcoming book, especially why you decided to write it?

 

DM. I have based my leadership book on Rudyard Kipling's poem, IF. Kipling’s poem described 16 attributes required to be a man. When I rediscovered this poem in my late 20s, I realized that it was a simple set of rules for being a better leader and a better person. I have used it in my personal development since then. About six years ago, I started introducing it to people I worked with, especially people I was mentoring.

 

The book takes the same 16 attributes in the poem and looks at leaders from history who have used at least one of them. I have written a chapter about each of those leaders and the lessons we can learn from them. The first line of the poem says, 'If you can keep your head when all about you are losing theirs and blaming it on you.' As a leader, you need to have composure and to be able to maintain it in tough times. I wrote about George Washington during the early days of the American Revolution. Each chapter has a different leader associated with it. I encourage people to ask, 'How can you learn from this person? What can you do differently to maintain composure or to demonstrate the characteristic that makes a strong leader?' That's the essence of the book.

 

People who want to be leaders must decide to make that investment themselves. The book's introduction says that the content is not for people looking for a quick fix. Instead, the book is for people who want to invest the time and energy to do it right, recognizing that being a leader is just as important as investing in any technical skills.

 

EL. Are you currently mentoring any IT colleagues from Capital One?

 

DM. I still mentor people at Capital One or people who have left and gone on to other jobs.

 

To be a CIO, you have to be credible in the IT community. You also have to be credible to the business. A former colleague and I often debate which comes first -- the business side or the technical side. At the end of the day, the IT folks need to know that you are one of them and the business folks need to know that you are one of them as well.  I help people shift gears to remain authentic with whoever their audience is.

 

EL. What are you perceptions of young people coming into IT today?

 

DM. They are so anxious to get ahead  now. They are always looking for the next promotion or the next opportunity. They are the hungriest and most aggressive group I have ever seen. I always encourage them to take their time, learn their skills, and grow them in a reasonable way. The ones who are not doing this are burning out.They often not have the foundation beneath them to support themselves. We are seeing a mixed bag of young people. The most successful ones I have seen are those that really love the relationship between technology and its ability to enable business growth. If you want to work in financial services, or any other industry, you need good technical skills, but it is more important that you understand how technology will enable the business to deliver results and create value. Sometime people who I mentored wanted to be pure technologist.  They really loved the technology. I would often encourage them to follow that path by going to pure technology firm where their skills and passion would be most appreciated.

 

I am a big fan of off-shoring. It has enabled significant changes in the IT field. It is also presenting challenges for young IT professionals. Today’s young people are competing with some of the best talent from across the globe. The talent coming from offshore firms, especially India, is exceptionally strong. As an IT leader, my challenge was finding ways to attract and grow both in-house IT talent and off-shore talent. That really requires balance.

 

Elizabeth M. Ferrarini - She is a free-lance writer and IT consultant from Boston, Massachusetts. Reach her at elizabethferrarini@yahoo.com

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