With more than $26 billion insurance investment sales, New York Life Insurance Company, a Fortune 100 company founded in 1845, ranks as one of the largest mutual life insurance companies in the United States and one of the largest life insurers in the world. It has the highest possible financial strength rating from all four of the major credit agencies. Headquartered in New York City, New York Life's family of companies offers life insurance, retirement income, investments, and long-term care insurance. New York Life Investment Management LLC provides institutional asset management and retirement plan services. Other New York Life affiliates provide an array of securities products and services, as well as institutional and retail mutual funds.

While the economic downturn has wreaked havoc with some major insurance companies, New York Life has held its own, if not exceeded its expectations for financial growth and stability. Much of the company's success builds on a solid IT strategy that supports both the present and future needs of the company.  Eileen Slevin, senior vice president and chief information officer for New York Life, say that the company looks seven years to ten years out to see what types of technology investments the company needs to make, what applications the business units anticipate, and what type of infrastructure needs to be built to support those applications.

Enterpriseleadership.org recently sat down with Slevin to learn more about the company's IT strategy and its approach to long-term planning for IT investments. Here is what she had to say:

EL. Can you describe your IT organization?

ES. I have a centralized group of 1,400 full-time staff members. About 1,250 of them are employees and the rest are consultants. We have an applications development group, an architecture group, an engineering group, an operations or service delivery group, a finance group, a human resources group, and a best practices group, which includes the project management office. I also have a security group. One of our senior executives manages our innovation program, which includes employees spanning the department.

EL. Can you describe a couple of the key technology initiatives that have helped to make the company more customer-centric?

ES. Over the last several years, we introduced some large systems in a couple of significant areas. In 2005, we introduced our new business system, which we have been continually updating. This mission-critical system firmly planted us on the Web. In fact, we call it the cash register for the company. For example, the customer applications the agents submit come through the system, where they get underwritten, and issued.

For the past several years, we have been updating our agency portal, which provides the agents with all of the sales support tools electronically. Since our dedicated, career force of agents provides the main interface with our customers, this portal is critical to our success. We also conduct our business through supplemental channels as well. We recently introduced a contact system as a major addition to the agency portal. Prior to that, we had delivered a collaboration platform to them.

EL. Any other key technology investments you care to mention?

ES. We have an entire program going which focuses on how we make technology investments to support the future needs of the business. We began the process about two years ago by sitting down and trying to understand what the business units would need in the future. We are talking about seven years to 10 years out. We needed to build the infrastructure in advance of the business units building applications upon it. By understanding what applications the business units would need in the future, we would have an easier job of defining the infrastructure they would ride on. We currently have approval for 14 infrastructure projects and nine business projects. The infrastructure projects are spread over seven years to eight years, and the business projects are spread over 10 years.

EL. What are some of the business projects?

ES. One project involves a new system for our sales proposals or sales illustrations that agents present to clients. It is actually part of the agency portal process. We are taking the former client server version of this system and bringing it to the Web. The basic agency portal was built around content and information the agents needed to get access to, such as forms. The contact system we just rolled out helps them to manage information about their customers. After the agents determine what they need to sell, they can use the illustration system to explain the finances around the offering. The new business system is at the end of the process. We will be developing some things that fit in the middle. We have a program for our agents to be able to turn over their business to their family members, such as children who may be taking over the business, or colleagues who may be doing so. We provide them a more effective way to do this as they are near retirement. It gives them the ability to slowly transition that business over to someone else to manage it for them, thereby providing the long-term support that our customers have come to expect from New York Life.

EL. Why have you gone out as many years looking at technology investments?

ES. In the past, we had done three-year planning.  We believe that seven years to -10 years gives us a more favorable time frame to build the infrastructure that these applications would need to run on. We need to make sure that we are building a full and robust infrastructure. The company has been doing rounds to plan and to set goals for ourselves for 2015 and 2020. Using that as a basis, we then spoke to the business unit leaders about the applications they would need to meet these goals and objectives. Preceding that, we needed to understand what infrastructure we had to build.

EL. Can you talk a little more about your strategic planning process?

ES. We have been working from the top down, including every business unit. This work has been around more of the wide-reaching scenarios, such as inflation. Because we have set our aspirational goals out that many years, we talked about breaking through some metrics that we have not yet achieved. For example, what happens if we double the number of agents, or what happens if we get to five million customers? How will our systems hold up? What will we need to be able to do to support them? The business would need to do some of these things seven years to 10 years from now. We needed to look at how we would support all of these different things based on our growth.

EL. Are there any particular tools that you used to help you through this process?

ES. We have a unit set aside for some of the strategy planning and economic scenario planning. Most of the effort has been task forces and publishing position papers.

EL. Has all of this planning changed your governance process?

ES. We set dependencies for building out these infrastructure programs and business programs. For example, if we were going to install this infrastructure, it would be needed for our customer service applications in the future. We need to make sure we tie these projects together between infrastructure and business. The importance of specific technology was one of the things we always had a difficult time explaining to the business units. As a result, the governance process is something we now look at for each of these projects. Specifically, we look at the relationships between the projects and in the interdependencies. We make sure that these relationships still hold, and we adhere to the things we said. We have brought this program to the executive management committee several times. For top management, the governance process has been around understanding and telling us what the business objectives are, then sizing how much we can absorb into our financial model and making sure all of that runs through all of our numbers going out in the future.

EL. Any specific methodology do you use for measuring the effectiveness of technology investments?

ES. We use most of the common techniques such as ROI. We did a rigorous cost benefit financial analysis. For example, we looked at what projects would drive down costs versus the projects that would promote growth. Where we had sales coming in, we did marginal value add. Where we had expense savings, we used net present value analysis.

EL. Have you driven cost out of the company?

ES. Because we just initiated this program in 2009, we have not driven out cost with it yet. Separately, we have some strategic initiatives looking at how to drive down some future costs. In doing the cost benefit analysis, we said we could see more cost savings if we could automate some of the work done by our service centers, or provide self-service capabilities. We have identified what the savings would be. We have done this very conservatively, and have made it part of our analysis.

EL. Are you looking at cloud computing for some of these applications?

ES. We are at the very early stages of looking into cloud computing. We are also looking at how we can do our own kind of cloud computing in addition to that. We think cloud computing has a definite place for us in the future. I still have some concerns around security. I am not as comfortable with the public cloud as I am with a private cloud.

EL. What are you doing in collaboration?

ES. We do have a collaboration platform right now for our agents. We built several custom applications for them to use on that platform. We introduced that three years ago. We also use Sharepoint at the team level, but we have not done anything with it across the board for our employees. We have developed some grassroots wikis. One of the 14 infrastructure projects looks at a collaboration suite and expands that. We were early in this space. Because of the large number of agents who use it, we now need to advance that collaboration platform.

EL. What was the catalyst or driving force for your strategic business technology investment program?

ES. Back in 1999 or 2000, we put together a seven-year technology strategy plan. It enabled us to rollout our initial Internet application capabilities in early 2000. We hit the end of that plan around 2007. At that point, we knew we had to start developing our next technology strategy for 2008 and beyond. As we spoke with the business unit heads about some of the infrastructure and technologies that had good business applications, we realized that they were not thinking about the future to the degree we needed them to. To this end, it made it difficult for us to understand what infrastructure we should build and what technology strategy we would devise. That is how we then went down the path of working with the businesses to understand the applications. About 18 months ago, the executive management committee, on which I sit, came up with the goals and objectives we need to aspire to going forward. Using these things, we worked with the business units to help them define the applications they would need to meet those objectives. That is what has enabled us to lay out the infrastructure plan. All and all, that is how we developed our technology strategy.

EL. Have you done anything in the meantime to help the businesses understand the significant of this technology?

ES. At the start of this process, we did several educational sessions for the business on such topics as networking, legacy modernization, and collaboration.

EL. Has the economic downturn affected your company?

ES. We did well in 2009. While we are not are immune to this type of economic environment, we had a great year. We maintained the highest ratings from the four major ratings agencies. We believe that we have seen a flight to quality. Our financial stability, which is one of our foundational pillars, served us well. Our history of conservativeness also served us well. Our agents got the right messages out to customers. Because we are a mutual company and not a publicly held company, we can plan for the future and not worry about the short term. I am glad that we have been able to invest in technology.

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

Where would we be today without the Internet? It certainly has caused a global revolution in the way we live and work. You might say that it is the catalyst for  global connectivity.  Using a mobile device, you can do everything from connect to your office email to ordering a pizza. Emily Nagle Green, CEO of Yankee Group, a Boston-based global technology research firm, calls this phenomenon ANYWHERE, a world in which all people can connect to the things they care about from anywhere and at any time. In fact, Green has written a book called ANYWHERE: How Global Connectivity is Revolutionizing the Way We Do Business. In the book, she examines the fast, unfolding changes in communications technology, and shows businesses how to harness the power of ANYWHERE to create new revenues streams and ignite dramatic business growth.

Enterpriseleadership.org recently sat down with Green to talk about the concepts she presents in her book. Here is what she had to say:

EL.  What motivated you to write this book?

ENG: For the past 40 years, Yankee Group has focused on the changes in connectivity. During the past year or two, we have seen an expansion and acceleration in making the universally connected environment a reality. It is a natural follow on to the commercialization of the Internet. We have essentially computers in our pockets. Connecting all of the devices we care about will become the next big platform in computing technology. Events such as the explosion of business people relying on devices such as the Apple iPhone motivated me to write this book. I also wanted to give people some advice about how they could benefit from the rewards from an expanding network infrastructure.

EL. Can you give me your elevator pitch for the book? 

ENG. ANYWHERE is the name for a time when all of us will be able to connect to all of the things we care about. It will become the largest technology revolution in our lifetime. Technology revolutions, like lots of other revolutions, bring risks and rewards. Much is at stake here. We will see trillions of dollars of new economic value created in aggregate from the maturation of this global ANYWHERE network. Businesses need some guidance in how to figure out to get ahead of that, such as how to identify the potential impacts of their business.

EL. How well-prepared are global CIOs for ANYWHERE? What two pieces of advice would you give to them?

ENG. Some CIOS are well prepared, but as I group, I do not think they are well prepared. The challenges of the recession, in particular, from disrupted them from thinking about how to anticipate the future. As for advice, I would tell them to first understand how quickly the unconnected world is becoming connected. The unconnected world includes the billions of people who have not been online in the last explosion of the Internet. About four billion of them will join the global network through adoption of digital mobile phones. The unconnected world also includes many assets in their own organizations. The organizations they partner with will add connectivity and transform the businesses world with those assets. In summary, they need to understand the pace of the unconnected world coming online and think about the diffusion of connectivity in their own businesses. They especially need to look at what activities have not yet benefitted from a pervasive network, and then think about how automating those activities could enhance the businesses' profitability.

EL. What changes in the enterprise architecture do they have to make in order to better prepared for ANYWHERE?

ENG. The two things one - they have to start the process of moving away from a proprietary IT infrastructure. We are moving to a world where businesses will not need to buy and manage their hardware and software. This transition will take some time for larges businesses to absorb. You need to start now. You need to plan your move away from your own investments and infrastructure. You also need to start looking at all of the employees' activities that mobile technologies do not support.  Last, you need to think about how to put technology, such as mobile apps, in the hands of your employees all of the time. This way you can recapture the lost productivity when they walk away from their desks.

EL. What are some of the key disruptive technologies beyond cloud computing that are driving ANYWHERE?

ENG. The three core technologies include the adoption of IP as a standard digital networking language, explosion of the broadband technologies, and the great economics of wireless. Today, we are building things on top of these technologies. We are most interested in how we think about information display and consumption.

For example, with maps from Mapquest, we can expect to see mapping displays for all kinds of things layered on top of them. It might include augmented reality where a camera points to a real-world environment and collects information about that environment. We will never see maps as things just having street names and points of interest. We will expect maps to identify buildings, commercial resources, and distances. We will expect them to come embedded with recent images -- if not in real time. We expect real-time congestion information to show up. Our concept of a map will require anywhere from six to 10 dimensions of information. This will happen because a network appears wherever we need it, and that network has the capacity to move massive amounts of information. We do not have to reply on text.

EL. Will things such as semantic Web technology capabilities contribute to put value to ANYWHERE?

ENG. The ANYWHERE network brings us some challenges. For CIOs, it is real-time information. How do we digest information when it comes from censored networks that can tell us the status of very complex environments? The Web is not ready for that yet. How are people going to digest petabytes of information that comes in on a regular basis? Any innovation around the semantic Web yet is not ready to deal with the volume and complexity of information that is coming from equipping the world with communications technology.

EL. Has the economic downturn hampered an organization's ability to get to ANYWHERE?

ENG. Yes and no. It had a negative impact at an aggregate level. The economic downturn delayed network operator's investment in transforming their networks.  The networks we have today are in transition to the networks of tomorrow. Today's networks have greater capacity and intelligence added to the network infrastructure. Billions of dollars of capital need to flow into existing networks to renovate them to meet our burgeoning appetites. That process slowed down quite a bit in 2009 as network operators carefully spent their capital. That delayed the maturation of the network infrastructure.

During 2009, everyone hunkered down and did not think about growth, but cost cutting and trying to keep their boat afloat. In that sense, it also had a negative impact. The phrase - necessity is the mother of invention - has much merit. People start turning to smaller solutions when they need to be resourceful. You see the explosion of mobile apps as one avenue where businesses could say to themselves: 'Gee, I want to create some capability. I have a workforce that carries iPhones or Blackberries in their pockets. How can I do this in a quick and simple way?' We do see some more inventive uses of technology emerging as people lower their technology spending level. They say, 'If I do not have the massive capital expense budget that I had in past and this will not change, then I have to get used to that idea and be more creative.' We have seen some emergence of creativity from that recession.

EL. Five years from now, will cloud computing be a pervasive utility we hear about?

ENG. I believe so. In five years, small- to medium-size businesses will depend on IT services from cloud computing. Small businesses starting now may never invest in much proprietary infrastructure because it is already so workable for them. We will see more widespread adopting of cloud computing in this space. For large companies, the move to cloud computing involves a long-term conversion process. These companies still have COBOL embedded in the guts of their IT organizations. It will take awhile for the current model for hardware and software computing to work its way out of the largest firms. Five years from now, cloud computing will be robust and widely deployed.

EL. Why did Yankee Group deliver a book now? Is this the first book written by a Yankee Group CEO in office?

ENG. This is the first book written by a Yankee Group CEO. I cannot speak for why Howard Anderson, the founder of Yankee Group, never wrote a book.  He left the company in 1995 at the beginning of the Internet explosion. Perhaps, he was preoccupied with other things and changes in ownership. Because I was not with the company then, I can only speculate.

EL. What are some of the major changes in enterprise architecture in global companies that will need to occur to make ANYWHERE possible?

ENG. They will start by integrating information from many more assets in the business. For example, the RFID space had a vision for years about how more objects in our lives could participate in the global network. RFID proponents have struggled to get the RFID tag cost down and sort out some network issues. The explosion of WiFi in business environments has brought with it the cost of activating the network and supporting tagging device. As a result, it makes RFID more affordable.

Another big enterprise network change involves alerting business assets to their status. We will see much less focus on fixed assets, such as real estate, as employees become increasingly mobile. We already see that now with working from home and remote offices. Businesses have to think more carefully about why they need offices in multiple locations, and how can they, instead, use the network as an umbilical cord to interact with their employees.

We will think more generously about what resources we need to give those employees at the other end of that cord. They need to have quality access devices at the other end of the network so that they can have a first-rate experience. We are not equipping them with an office any longer. We are not buying them coffee and Danish in the mornings. As a result, we need to make sure they have a device and a connection speed that will allow them to have a productive virtual work experience.

EL. Do you think the down the road there are going to be problems with this type of a workforce?

ENG. It is a huge shift. It is definitely disrupting in markets such as the North American and Europe. We have seen a disconnect about how employers and employees view their relationship. For examples, we are seeing a piecework model where work-at-home employees answering calls from a virtual call center. They get paid for their time on the phone. The issues we are starting to see include the following: Should an employee have one employer? If they can take calls for one employer, why can't they take calls for other employers?  If an employee has multiple employers, then who is responsible for the employee's benefits? This dilemma will cause some strange conversations for the next generation of workers.  We will see different attitudes about employment within the office bound environment.

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

During a tough economic climate, consumers tend to become very conscious about their spending and tend to go with brands they know and trust. That's the opinion of Eric Wiseman, CEO of VF Corp., a $7 billion global apparel manufacturer and retailer. While VF Corp.'s revenue dipped about five percent during 2009, the company has managed to hold its own, capping off 2008 as a banner year with $7.6 billion in revenues.

VF Corp. sells its well-known brands, such as Lee, Nautica, The North Face, Wrangler, and Vans, through more than 67,000 retailers in about 150 countries. The company owns and operates more than 700 retail stores, including about 60 outlet stores.

Prior to 1998, VF Corp. derived most of its revenues from manufacturing brands such as such as Lee, Rider, and Wrangler, and selling them wholesale to large retail stores.  In 1998, VF Corp. aggressively began acquiring well-known active wear and contemporary brands, such as Nautica, The North Face, Eagle Creek, Eastpak, lucy, Vans, and several others. The company divested itself of unprofitable brands. In 2004, VF Corp., which had revenues of $6 billion, launched a bold growth strategy to transform itself into a global lifestyle apparel manufacturer and retailer. "We Fit Your Life" became the mantra for the company's growth strategy.

Enterpriseleadership.org sat down with Wiseman to discuss the company's business transformation, and the role technology has played in it. Here is what he had to say:

EL. How did you categorize your different brands and how do they contribute to revenues?

EW. We group our brands under coalitions such as outdoor and action sports (Vans and The North Face), jeanswear (Lee, Rider, and Wrangler) , sportswear (Nautica), and contemporary and imagewear (For All Mankind and lucy). We further group the coalitions into lifestyle and heritage. Lifestyle includes outdoor and action sports, and sportswear and contemporary brands. Heritage includes jeanswear and imagewear. We acquired most of our contemporary brands during out growth period. These brands contribute to revenue as follows:  about 36 percent from outdoor and action sports, 36 percent from jeanswear, 13 percent from imagewear, about 8 sports from sportswear, and five percent from contemporary brands.

EL. What was your vision statement for the 2004 transformation?

EW. Our vision statement was to become more growth oriented by investing and building leading lifestyle clothing brands. Our transformation called for us to redirect our business from being a wholesaler to becoming more international and a more direct-to-consumer business. Our six tenets or growth drivers include the following: build more global, growing, lifestyle brands: expand our share with winning customers; stretch our brands to new geographies; expand our direct-to-consumer business; fuel the growth; and build new growth enablers.

Ten years ago, we had the reputation of being a rock-solid apparel manufacturer that built first-in-class programs for big box stores such as Wal-Mart and Kmart. That was most of our business. The good news is that we still exist. In 2007, many of those stores selected us as vendor of the year. We do a good job of marketing through mass and chain store channels. By changing our brand portfolio, we now reach more diverse customers than any other apparel company.

Up until 1995, everything we sold we made in a U.S. factory. We became the last apparel company to move offshore. You can argue that we moved too late. Because we stayed here that long, we developed a culture and a skill around incredible skills and execution. We could not survive making products in this country unless we were really good at engineering and operations plans and engineering in the factory.  It is part of our DNA. The ability to execute complex things terrifically well is part of who we are and we have not lost that.

EL. How did you know your transformation strategy would work?

EW. We were confident it would work. In 2007, we went through a robust bottom to top reconsideration of our strategy. We asked every business unit everywhere in the world to think about the six items we identified as our core strategy and to reassess their relevancy with an open mind. What came out of that was a revised growth plan we announced in 2008. The six fundamental tenets of our strategy remained unchanged. We made a minor revision to make sure we were still relevant for the environment we are in today. We still think we have the right six core tenets for our growth strategy.

EL. Can you explain your integration process?

EW. Our integration process began with our 2004 transformation. We developed a repeatable process for the 10 brands we acquired at the time. We continue to refine this process.

Here is how it works. Say we love your brand and your management team, and think your brand would help us get to a new consumer, a new geography, or to a new channel of distribution. We want to acquire you.  In essence, we would like to take your brand to the next level. We would like to have you and your team join us. You will run the front end of the business.  You and your team will design the products you want, pick the customers you want to sell to, and continue to brand development. We will give you permission to do that. It is non-negotiable. We will run your distribution centers, which is also non-negotiable. We will decide where you will source. We will put you on our IT systems. You will use our financial system and our HR practices. The kicker is that we will take your brand, you team, and your products anywhere in the world, especially where we have a platform and where we think it has opportunity. We will build a sidecar under that platform to enable your growth globally. If you would like to open retail stores, we have much expertise in that now and we will enable that.

As a result, the seller gets to keep the front end of the business with the passion and genuine pieces of the brand. All of the operating functions come to us because we get a great return for our shareholders. We reinvest some of those savings back in the company to drive growth. That's why our growth has been what it has been. It does not always work perfectly. That is the basic structure. Sometimes we leave the business standalone in its own building. Sometimes it makes sense to move it into adjacent VF buildings for business reasons. These discussions happen over time.

EL. How has the economic downturn affected you business?

EW. Our revenues decreased by about five percent. We did not anticipate much improvement in the economy during 2009. Although it has been a tough couple of years, we have taken some even tougher actions. We have been controlling expenses, investments, and lowering inventory and capital expenditures. We focused on our liquidity, our core strategy around lifestyle brands, taking in the new geographies, building our direct to consumer business, and leveraging our scale and size in the supply chain are the right strategies.

Since we changed our strategy in 2004, we have shown that it is working. Our revenues grew on a compounded basis more than 10 percent over a five-year period. Our earnings grew by 11 percent. Our gross margin had expanded by 230 basis points through 2007. We gave some back in the last quarter of 2008 as the economy shifted.

In 2008, we reported an all-time record for revenue and an all-time record for earnings per share. We delivered $679 million in cash flow, which was above the five-year average and the second highest number in five years. I was proud of this team for pulling that off in a turbulent environment.  Also, 2008 was the 36th year in a row that we increased our dividend to our shareholders. It is a good part of why we are a good investment. We ended that year with more cash than we started. We ended the year with less debt than we started.

EL. How do you allocate your capital budget expenditures?

EW. The bulk of our capital budget goes to acquisitions first, retail second, and distribution centers third. We have aligned out capital budget to support our growth strategy to invest in acquisitions, retail stores, ecommerce, and distribution centers.

EL. How did you build out the infrastructure from technology perspective as you began the transformation?

EW. Because we did 10 acquisitions in five years, the integration of the technology has been hard. Our technology has worked hard to keep up with it, which is fine. We have a suite of systems that are potentially relevant to all businesses. If we are going to put in a demand forecasting system for a brand, we will use this one if the brand needs one. Not all of our brands need all of our systems. Some of the systems have no trouble serving a brand that generates a half billion in revenues. A similar system, however, would be overkill for a $70 million brand.  Over time, everyone ultimately gets on board on our IT systems.

EL. Several years ago, you folks hired your first global CIO. Why didn't you do that sooner?

EW. Over time, we had a head of IT and a relatively stable portfolio of brands. As we began adding all of these new companies and divesting  all of the others, we said we needed to make additional investments in many areas, especially in mergers and acquisitions, corporate strategy, marketing and brand development, and global business technology. To carry out these activities, we needed a stronger IT leader.

EL. How do you work with the CIO?

EW. Martin Schneider, our CIO, is an important part of our 12-person operating committee. This committee guides the corporation. Like the other executives on the committee, Martin has an excellent point of view about how to keep the corporation moving forward. That is the best way I can describe how I work with Martin.

EL. What have you learned from your CIO that you didn't know?

EW.  Because of his Gillette background, he brought a more sophisticated global perspective than we had at that time. He had added much value. We were pursing at all-or-nothing portfolio of technology. Martin introduced the thinking of not all of it is helpful to all of these businesses. We are better off to let them select the tools that they need. As a result, we function as more of a service provider and an enabler of their success rather than as a corporate censor requiring them to use everything we have to offer.

EL. How do you run the technology organization?

EW. Each business, such as NorthFace and Wrangler, has a person who reports to Martin, but sits at the management table of the brand. That person helps the brand leaders to run that business every day.  That is our version of the hybrid matrix organization.  We use this same model for human resources, finance, distribution, and our supply chain. The majority of their incentive compensation depends on how well the business unit does.  Originally, we paid them on how the corporation did. We found that this new structure helps them to be more a part of the team. The entire team gets paid together.

EL. How do you go about making technology investment decisions?

EW. We have a typical budgeting and review process for the company. At the beginning of the year, we sit and review the global technology budget. Expenses of certain sizes require different approval levels. Martin can approve some of the investment. Some of them go to the CFO. I approve investments above a certain level. The board needs to improve capital investments.  Each quarter, Martin will give the operating committee his update on the status of everything going on in his world. We keep the fall moving forward this way.

EL. What is your methodology for looking at the success of technology investments?

EW. We look at a retail store investment differently than we do a technology investment. With technology, we look at the ROI and a payback time. We look at the rationale for the investment, such as strategic, cost reduction, or productivity. There are many metrics In fact, we are very metrics oriented.

EL.  What is the major challenge that retailers face during a tough economy?

EW.  It is consumer confidence more so than consumer spending.

EL. Where do you think your competitors are falling short?

EW.  Why are we doing better than others in this environment? We have a portfolio of relevant brands. Consumers trust brands. When consumers are being very conscious with their spending, they will go with brands they know and trust. Second, we are good at delivering innovative products that are relevant to the consumer and also offer great value. It is not just about price. We hear loud and clear from customers that are happy to pay top price for something if they perceive it has having great value. We execute very well. Because of our discipline and focus on execution, we can minimize the mistakes we make. This capability has helped us to get through this environment.

EL. Some companies, such as Procter & Gamble, spend much time on social media and collaboration trying to plug in what certain consumers say. What are doing to get closer to your customers so that you design your products?

EW. We are as good as any apparel company at marketing sciences that help us to understand consumer. We are pretty close to Procter& Gamble in what they do. In fact, some of their executives visit us to share their ideas. We understand as well as anyone how to make relevant products for consumers. We test everything we do. We use various methodologies from online testing to where you can go look at our products and tell us what you like about them. We do that with 10s of 1,000s of people. It helps get us from making 20 shirts to five we should make. We go into people's homes and talk with them. We spend millions of dollars doing these things.

Most of our research is proprietary that we built for a specific purpose. We are in so many different brands and markets. If we want to understand what Italians want in active wear, we have to narrow that down and speak to Italians about ski outerwear. Some of our other brands use social media as part of their marketing effort.

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

The economic downturn has caused executives at all levels to scramble to find innovative ways to keep employees motivated and contributing to the organization. Enterpriseleadership.org turned to Ken Blanchard, the best-selling management book author, and leadership researcher and consultant, to learn how C-level executives can lead at a higher level. In fact, Leading at a Higher Level (Revised and Expanded) is the title of Blanchard's recent book. It  includes work The Ken Blanchard Companies have done with Nissan, Tyco International, and Ritz-Carlton Hotel Company.

Blanchard gain fame in 1982 when his 111-page One Minute Manager made the best-sellers list. It has sold more than 13 millions copies. This book remains on the list of best-selling business books. He has continued to turn out best-selling titles such as Whale Done, Know You Can, and The One Minute Entrepreneur. Blanchard frequently co-authors books with CEOs, such as Garry Ridge, the CEO of The WD-40 Company.

He teaches in the Executive Leadership Program at San Diego State University. Blanchard has received many honors and awards for his contributions in the fields of management, leadership, and inspirational speaking. He was inducted into Amazon.com's Hall of Fame as one the top 25 best-selling authors of all times.

EL. Why did you decide to write this book despite the economic downturn?

KB. For a long time, people have been asking us for our curriculum -- in what ways do we help companies? This book became an attempt to pull together everything we have been doing for 30 years. I have 15 co-authors. All of these people helped us build our company including my wife and my son. It was a good time to do it. I define leading at a higher level as essentially helping people accomplish worthwhile goals. It takes into consideration the needs and concerns of everyone involved. Making money is not a worthwhile goal; it is the byproduct of a goal. You need to consider why the economic downturn happened. It came about because of greed, short-term goals, and Wall Street. It is an entire value issue.

EL. What affect has the economic downturn had on C-level executives and what have companies done about it?

KB. I recently spoke at a major Siemens conference in Budapest, Hungary. The economic downturn has also affected this company, bringing about some ethical issues. Attendees included all of Siemens' major clients. The conference had the name Ascend to suggest leading at a higher level. So, what can we learn going forward? How do we operate in a more ethical way? European companies call it the three Ps-- people, profit, and the planet (the environment.). Companies today have much interest in these types of things. Some people will not get it. I am talking about people who evaluate their life on their performance and the opinion of others. They keep score on how much new money they make. Enough is never enough.

EL. Who are the leading-at-a-higher-level CEOs whom you admire?

KB. I wrote one book with Garry Ridge, the president of theWD-40 Company, called Helping People Win a Work: A Business Philosophy Called 'Don't Mark My Paper, Help Me Get an A.' He is a good example of a CEO who leads at a higher level. I am also writing a book with Colleen Barrett who just stepped down as the president of Southwest Airlines. This amazing organization leads at a higher level. Bill Pollard, president of ServiceMaster, exemplifies another CEO who leads at a higher level. I have been impressed with the president of American Express Ken Chenault. He has gone through good and bad times with American Express. I am excited about Meg Whitmore, the former CEO of Ebay.com, who plans to run for governor of California. The California governor's race needs a candidate who knows something about business and who can take a leadership role. Some of these folks, including Obama, need a course in economics.

EL. What role does technology play in the ability to lead at a higher level?

KB. We have to look at technology in a positive light. A catalyst for Obama's presidential win included his ability to lead at a higher level. He had an honest desire to talk openly to people in other countries. He ran a 2010 campaign, while Clinton and McCain both ran 1990s campaigns. Obama twittered people and he also sent them email. He used technology to keep the communication open. I try to do the same. For example, every morning I leave a message for everyone in our company. I function as the chief spiritual officer and energy officer. I praise people. I also leave a conventional message about our vision and values. People can hear in on the voice mail and receive it via email. Now I also use twitter for communication.

I do not think electronic communication, however, should always function as the first line of communication. People ought to get away from their desks and talk to people, not send email to someone in the next office.

EL. Can you briefly describe how you helped Nissan executives lead at a higher level?

KB. We have done much situational leadership training throughout Nissan. We helped them to develop a common language around performance and a way to communicate with people. In situational leadership, we always say it increases the quality and the quantity of the conversations between leaders and their people. That has been a helpful thing to them. We have done this at Nokia and American Express.

EL. Do these companies use any other methods besides the common language?

KB. I do not know enough about what they do with technology. They used us as a way to deal with people face to face. We try to get managers to meet at least once every two weeks one-on-one with each of their direct reports at least for 30 minutes at a time. The direct reports set the agenda and managers meet with their people 26 times a year. That really can have an impact. I wrote about this in the book with Ridge.

EL. What would you tell executives and managers about using situational leadership in order to get the most productivity from people with different skill levels?

KB. People often ask me if they need to be face-to-face with people to use situational leadership. The answer is 'no.' It all starts with first having clear goals. Ridge defined very clear goals for WD-40 Company employees. This process replicates knowing everything that will be on the final exam before you take it. Once everyone understands the goals and objectives, then together they can analyze their development level. This includes their competency and their commitment to do that. For example, if you deal with self-directed achievers who know what they are doing and are committed to doing it, you need to use a different leadership style than for very enthusiastic beginners. The latter become very excited about a new assignment, but they do not have a true sense of what they ought to do.  You can delegate to self-directed achievers, but the enthusiastic beginners will need direction.

We also use a coaching style for disillusioned learners, people who find things more difficult than they thought. Then we have cautious people who know what to do but who are afraid to do it on their own. It really helps people to decide. You might have to do different strokes for different folks. Likewise, you might have to do different strokes for the same folks for different parts of their job. It really permits people who deal with others to focus on what part of someone's job needs more attention. You also need to determine the type of attention that will work the best. Should it be via telephone, face-to-face, or email? It gives you an entire strategy for dealing with people.

EL. Can you provide an example of when you had to use situational leadership?

KB. When I was a faculty member at the University of Massachusetts, I got in trouble for supervising too many doctoral students. My students were in different levels of development in their doctoral thesis. Some people wrote better than I did. If they needed me, they would call me. I had other students who needed tender loving care once and awhile. I also had students who needed much direction and supervision. I could use different strokes for different folks. The assumption that you need to use the same leadership style with everyone is not true.

EL. You mentioned how the innovative use of technology helped the Obama campaign. Do you see innovation efforts in companies that lead at a higher level?

KB. Companies that lead at a higher level tend to treat their people as business partners. When you treat your people as business partners, you also share information with them, and create opportunities for them to be empowered and be creative. Whenever I lecture about innovation, I talk about the hourly 3M employee who developed the Post-it note. Now 3M welcomes employees at all levels to have ideas and come up with innovations and suggestions. If companies want to survive today, they need to have four characteristics:

• customer drive because today the customer is king;
• cost-effectiveness by managing the financial part of the business;
• speed and agility because it excites your customers to know the person they deal with can make decisions; and
• continuous improvement in innovation.

Leading at a higher level encourages the spread of innovation throughout the organization. As a result, not all brains lead up the hierarchy. Companies leading at a higher level do not use words like superior or brag about who works for whom.

EL. Are companies that lead at a higher level prone to embrace social media more than more traditional companies?

KB. Yes! These companies are constantly innovating and taking suggestions from their employees. All of the smart companies want bright Y generation types. Look at the people who ran Obama's election campaign! They were in their early 20s. We have been searching to get more young people into our organization. About 25 percent of our employees are Y generation. When we ask them to work on a problem, they usually do not go to their boss. Instead, they go to the Web and then they get in a chat room. It amazes me what they can do with technology because they grew up with it.

EL. What can C-level executives do to get other levels of management to lead at a higher level?

KB. What I call servant leadership has two parts: strategic leadership and operational leadership. Strategic leadership includes setting the vision and the values, the direction, and the strategic initiatives. This is the job of the traditional hierarchy. Operational leadership includes how you live according to the values, and how you accomplish the goals and the strategic direction. You have to turn the traditional pyramid upside down so that the people at the lowest part of the organization rise up. These folks are closest to the customers. That is the servant part of servant leadership. The strategic is the leadership part of servant leadership. Most organizations get into trouble because they become bureaucracies run by ego-driven leaders who want to keep the hierarchy alive and well for operational leadership. Everyone sucks up to the hierarchy away from the customers, and then senior management wonders why things do not work out. When you empower, you give power. People can make decisions and do things that excite the customers.

We did a study on which of those two leadership behaviors -- strategic or operational -- has the biggest impact on organizational success. We found that beyond 90 percent comes from operational leadership and the rest from strategic leadership. Strategic leadership is important because it starts the direction. However, your people and your customers do not know what strategic direction is. All they know is how they are treated. If you do not drive leadership throughout your organization, then you will never empower your front-line people who can get excited and build loyalty with the customer base.  The interaction between passionate employees and customers drives organizational success.

EL. What should executives look for in future leaders? How should they integrate older leaders with younger ones?

KB. Organizations should not throw out their older seasoned people, but perhaps create opportunities for them to mentor the young people. The young people have tremendous energy and creativity, but they do not always know the culture or the environment, and what they need to accomplish. You need to find ways to have these two populations value each other. Today you need to manage the present and create the future at the same time. It is not good to have the same group of people doing both tasks. You cannot send operational leaders away to plan your future. They will probably kill your future because they either become overwhelmed with the present or have no vested interested in the future.

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

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 experienced 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 campaign 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 magnified that situation and helped promote  us to focus more on our customers. We want to do as much as we need to do for them."

Enteprriseleadership.org recently sat down with Johns to talk 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 and 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 development teams 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 Chapter 11. We have always had tight ties to the business, especially for driving global standards and common solutions 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 out of our backoffice transaction systems and put it into 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 processes, such as accounts payable, accounts receivable, 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. 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 Lowe's. 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. 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 which look for ways to build a more stable, less variable, more quality manufacturing technology platform. We have targets in the $25-$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 from a top-down and a bottom-up standpoint. As we continue to evolve more things, we begin to drive from the top down rather than the bottom up. We have a good line of sight into some things that focus 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, but that we actually track the value and make sure it is sustainable. One of the biggest mistakes many technology organizations make is to assume 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. Sometimes, 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 of 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 helps 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.

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.

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

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