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Jim Champy, Best-Selling Author and Technology Consultant, Talks About How Innovative Companies Inspire to Keep Customers Coming Back

tom@tomparish.com — Tue, 17 Aug 2010 05:37:19 GMT

(19:58)

In this podcast, Jim Champy, chair of Perot Systems Corporation and co-author of the best-selling management book, Reengineering the Corporation, talks about his latest book, Inspire: Why Customers Come Back. This is the second of Champy's three books in a Financial Times (FT) Press series about new business models. The resources section has a link to Enterpriseleadership.org's podcast with Champy about his second book, Outsmart: How to Do What Your Competitors Can't.

Jim Champy has a talent for seeing the writing on boardroom walls - companies have to change the way they work if they want to be effective. No wonder Champy's book, Reengineering the Corporation, became an immediate best seller throughout the early 1990s. Over the years, Champy's has continued to crank out books and consulted about how companies must redefine business processes and their strategies if they want to compete.

Several years ago, Champy embarked on a journey to find out how companies have devised new ways to do things, and what we can learn from them. Using a filter of double-digit growth and triple-digit growth, he came up with more than 1,000 companies - ranging from mostly emerging companies to some major corporations. Champy's research has turned into a FT Press three book series about new business models pioneered by these high-growth companies. His Outsmart book features case studies about nine companies, such as Partsearch, that are innovating about how to deliver a better customer experience by combining high tech with high touch. Inspire, his latest book, includes eight concise case studies about how businesses, such as Puma and Stonyfield Yogurt, have become successful by inspiring their customers to be loyal for the long term. Deliver, Champy's third book in the series, will focus on how successful companies execute on their strategies.

Champy says that innovation was the key to driving double-digit growth at many of the companies he has profiled. Talking about Inspire, he says a company's vision directly can affect its sales success. "The new generation of customers value transparency and authenticity above all. If you want to keep your customers coming back, you need to learn how to define a consistent value proposition - one that will make your customers stay passionate about doing business with you."

In this podcast about Inspire, Champy discusses the role innovation plays in the Inspire paradigm, the top five characteristics of customer-centric companies, and the ways CIOs and CTOs can use technology to get closer to both internal customers and external customers.

Bio
Jim Champy is chair of Perot Systems Corporation's consulting practice, and is also head of strategy for the company. He directs the company's team of business and management consultants. Before joining Perot Systems, Champy was chair and chief executive officer of CSC Index, the management consulting arm of Computer Sciences Corporation. He was one of the original founders of Index, a $200 million consulting that CSC acquired in 1988.

He also co-authored Reengineering the Corporation, which appeared on the New York Times' best-seller list for more than a year. His follow-up books include Reengineering Management, The Arc of Ambition, Fast Forward, X-Engineering, and his two latest books, Outsmart, and Inspire.

Resources
Jim Champy Discusses Inspire, FT Press
http://www.ftpress.com/articles/article.aspx?p=1349306

How CIOs Can Help Their Companies Outsmart Their Competitors, Enterpriseleadership Podcast with Jim Champy
http://www.enterpriseleadership.org/blogs/podcasts/2008/09/21/how-cios-can-help-their-companies-outsmart-their-competitors-jim-champy

Taking Care of the Company, The Wall Street Journal
http://online.wsj.com/article/SB123914815543399105.html

Production Credits
Tom Parish, Host and Audio Producer

Sponsored by BMC Software

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HCL Technologies CEO Talks about Building a Culture to Drive IT Productivity

bmc-elo@bmc-elo.hosted.jivesoftware.com — Tue, 10 Aug 2010 13:07:39 GMT

Launched in 1998, HCL Technologies Ltd. has quickly grown to become a $2.3 billion provider of custom-IT applications, IT infrastructure management, and business processing outsourcing. During this time, Vineet Nayar, HCL's CEO, has completely transformed the way the company's 55,000 employees in 26 countries deliver IT services to customers. His emphasis on Employee First and a strong belief in values-based leadership has earned Nayar much leadership recognition from both the London Business School and the Harvard Business School. In fact, the latter wrote a case study called the Transformation of HCL.

With strong strategic vision and a global outlook, Nayar has charted a defining growth path for HCL, which has catapulted the organization to being one of the last IT services countries in the world. In 2007, Business Week named HCL to the list of top 100 technology companies. Meanwhile, IDC recognized Nayar as having "one of the most cohesive and articulate visions" in the IT services sector.

Enterpriseleadership.org recently sat down with Nayar to learn how his management philosophy is fueling HCL's double-digit growth rate.

EL. Can you briefly describe what steps you took to transform HCL Technologies to become a provider of value-based IT services, rather than as a provider of linear- scale IT services?

VN. First, we recognized that the true value-zone exists between the employee and the customer. We asked the question, 'What business should we be in?' We answered it with, 'We should be in the business of maximizing that value' Next, we asked ourselves, 'If we are in the business of maximizing the value-zone, then how should we structure the company?' We decided to invert the organizational structure so that it faces the value-zone. We call this the inverted pyramid of the organization. Our last question was, 'What should be management's role?' We realized that management's role should be to enable, and hence, be responsible to the value-zone. We call this reverse accountability. To achieve the answers to our questions, we created a cultural transformation based on Employee First, Customer Second.

EL. Tell me about some of things that make that possible?

VN. The value-zone is in the interface of the customer and my employees. My employees need to be close to the customer. Meanwhile, I need to make sure the employees look at that value-zone rather than look up in the organization to try and to please their bosses. I call the latter trying to please the hand of God. I figure that if I could invert the organization and make managers accountable to the employees in the value-zone, then employees, in turn, would be empowered to deal directly with the customer. Next, we needed to have an effective interface between our employees and the customer. I call this the value portal. This piece of software measures ideas and measures the value we have created in that interface for the customer. Ideas that employees enter can result in a revenue increase or a cost reduction for the customer. The customer, in turn, rates each idea on a five-star scale. Each employee gets compensated based on each customer's rating. As a result, we have changed the employee's perspective to not only focus on the here and now, but what is he or she can do to contribute to the value portal.

EL. Are you paying your employees based on this system?

VN. We pay our employees based on a personal incentive. They earn points. The more ideas they give, the more points they earn. They can monetize their points.

EL. When did you realize that you had to make changes within the organizational structure?

VN. That is a very important question. It is like aging. Companies will slowly age and then refuse to believe that they have aged. They believe that everybody else is getting older except them. In 2005, we recognized that we needed to make the change. At that time, we were growing slower than our competitors. On the other hand, we were still growing 30 percent year over year. We also saw the controls of the industry dramatically changing, and changing needs of the customer. We were not changing and aligning our services to our customers' needs. We also realized that if we could experience this change, then we would come out way ahead of everybody else. Now look at what happened during the recession. During 2009, we grew year over year by 21 percent, including 21 percent growth in revenue. We are one of the few global IT services, which grew positively in 2009. Our growth proves that business models are changing, and that customer needs are changing. We started to take part in the journey way ahead of the recession. During the recession, we proved that our business model could accelerate our growth.

EL. Which key values are the most important?

VN. Any large approximation has to start with people looking at their current state of affairs and saying that they are not happy with it. That's what we did. We created a very exciting vision of tomorrow and laid out the roadmap for how we could move to that vision of tomorrow. We approached the governance structure by how we could transform the outlook of the employees.

We have three key values critical to the company. The first is Employee First, Customer Second. It is employee centricity. Our senior managers believe that their first responsibility is to their employees, and their employees' responsibility is to the customer. That value is very important. The second value is Creating Trust Through Transparency. Trust is a most misused word across the world. We believe that you can create trust by pushing the trust envelope. Our third value is flexibility. If something bad happens, a company must have the flexibility to respond to the situation in real time.

EL. What changes did you make to the enterprise architecture?

VN. Prior to the transformation, everybody ran their own small business, completely independently of each other. We had to integrate all of the business managers owning their businesses. We were focusing on the customer being the point of consolidation. The organizational enterprise structure changed from how we turn control into influence. It does not mean how many people report to you. What matters is how much influence you have over the value your employees create for the customer. We moved away from this unit called every business manager does his or her own thing. Instead, we integrated that exchange to focus on creating value in the zone of the customer. We created trust through transparency. Much data have been thrown at the desktops of our customers and of our employees. To this end, our employees have access to much transparency of data. We had to create an architecture where the information role was virtual, and the collaboration was virtual. Thus, we depend on virtually collaborative teams working together. So to make all this happened, we implemented the enterprise architecture all over again. We did over all of our IT systems. We re-implemented the social networking technology on top of these systems. We used Web 2.0 for data availability and collaboration at the desktop.

EL. I read that various employees can interact with management. What did you do with management to get them to accept this feedback?

VN. I, fortunately, believe that the management of any company must seek the right direction. There is the goal about winning. Upper management wants to win, and thus be part of a winning company or a winning team. Our management team realized several things: the architecture had changed, and the company transformed itself from a traditional company to a Generation Y company. As a result, the management team realized that they could lead us to a place where no other company had gone before.

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

Sponsored by BMC Software

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Rick Mears, Owens & Minor's CIO, Talks About Improving IT Alignment With Business Units

bmc-elo@bmc-elo.hosted.jivesoftware.com — Thu, 05 Aug 2010 13:07:39 GMT

With revenue of $8 billion, Owens & Minor, Inc., ranks as one of the country's top distributors of disposal medical and surgical supplies and a leader in healthcare supply chain management. The company serves some 4,500 customers, including hospitals, integrated healthcare systems, alternate care locations, group purchasing organizations, and the federal government. The company's 51 distribution centers service these customers. With roots dating back more than a decade, Owens & Minor provides its customers with products from major healthcare manufacturers such as Johnson & Johnson, Kimberly Clark, and 3M. Rick Mears, CIO of Owens & Minor, says that the company's technology and consulting services help customers to improve their inventory management and streamline logistics across their medical supply chain. "By continuing to improve alignment between IT and the business, we've been able to use make use of innovative technology to provide exceptional customer service." In fact, Owens & Minor has received several awards from Information Week for innovative customer-facing initiatives.

Enterpriseleadership.org recently sat with Mears to discuss how his IT organization carries out the corporate strategy.

EL. Can you briefly describe your IT organization?

RM. We outsource most of our IT services to Dell Services, which acquired Perot Systems. We have had a relationship with Perot Systems for 12 years now. We have a small data center in the home office. Dell's Plano technology center outside of Dallas, Texas, hosts most of our technology.

Our corporate IT team makes sure that the company gets what it needs from technology and bridges the gap between business needs, technology, and our services. To this end, we make sure IT aligns with the business and that we support the strategy and the vision of the company.

EL. What is the overall corporate strategy and how does the IT strategy fit into it?

RM. Our overall strategy is to be the best supply management services company in healthcare. Our customers range from a variety of healthcare providers. They rely upon us every day to get the right products at the right place, at the right time, at the right price, and at the right unit of measure. We refer to this process as our Bill of Rights. We warehouse supplies locally and typically make same-day deliveries when a customer places an order. We also represent the sales and distribution channel for a couple of 1,000 manufacturers that have decided to go through wholesale distribution to move their items. We view our customers on both ends of the supply chain. We sit in the middle servicing both manufacturers and hospitals, and other healthcare providers that buy from us every day. That has been our strategy for decades.

If you look at our current vision and strategy, we want to continue to be great in terms of our Bill of Rights. Our strategy going forward will focus on expanding our services to manufacturers beyond those that have typically gone through wholesale distribution. We also want to expand our services to healthcare providers well beyond the acute hospital facilities. In these areas, we would focus on all healthcare facilities outside of hospitals, such as physicians' groups.

EL. Can you describe some of the key IT investments you have made, why you had to make them, and what they returned to the business?

RM. Our focus has been to extend our technology and our services to our customers via the Web. We have invested much in e-commerce technology and Web-based technology to connect our business with our customers. Specifically, we have extended our supply chain capabilities to our customers to allow them to manage their own supply chain better. By leveraging our technology, our customers can take advantage of our decades of expertise in healthcare supply chain services. We have also done this on the manufacturer side as well. As a result, our technology investments have been to extend our capabilities to our hospital customers and manufacturer partners. We also have looked internally and have invested in our infrastructure. During the past year, we invested heavily in our voice recognition system for our 51 distribution centers across the country. Our pickers no longer use paper or a hand-held device to locate and select the appropriate products. Instead, voice recognition directs the picker to the proper location and tells them how many items to pick.

EL. Did you have to make changes to your enterprise architecture to carry out the voice recognition system?

RM. We have absolutely done that. We just completed a migration of our primary enterprise systems from a mainframe legacy environment to a Microsoft Windows environment. A few years ago, we decided not to take on a major systems replacement approach to our modernization. Instead, we worked with Microsoft and Dell to migrate our systems to a more modern platform. We have opened up many new opportunities. For example, we have created a modernization approach that funds itself. It leverages the operations on a less-expensive HP/Microsoft platform to fund a number of our application modernizations. We also rolled out a new customer service system that will have a dramatic impact on how we serve our customers, and how our customer service people are positioned using technology to serve our customers.

EL. Can you describe the governance process for making and measuring these technology investment decisions?

RM. We go through a capital investment review process. Our capital investment review committee includes our senior management team who evaluate the return on any major investment. The team also goes through the strategic investment process to look at whether or not the investment fits with the company strategy and our anticipated future direction. On the larger investments, we work with the board of directors.

We use an internal rate of return calculation. We put the business owners through a rigorous process. Specifically, they need to look at what is the value of the investment we are going to get, what are the benefits to occur, and how would we measure those benefits doing forward. We try to link the benefits to one of several things: new sources of revenues, improvements in employee productivity, or improved business processes. The return could also be reduced cost or increased revenues. We also make sure that the project is a strategic fit.

This governance process really is what links IT to the business and creates that alignment. The process we go through as we consider IT investments forces IT and the business to sit down and come up with real, actionable impacts of the investments, and to use these impacts to defend the need for these investments. We have to collaborate effectively before we bring the investment to the committee. We have to make the case, explaining how we are going to track the internal rate of return that has been set up (whether it is based on sales or expenses or operating profits). The next step in the process involves coming back as a team during post-implementation of the project to show the actual results that we have achieved. It is not only a governance process, but the way we force alignment between the business and IT.

EL. What did it take to achieve this type of alignment between IT and the business?

RM. It took a while to achieve this type of alignment. When I came on board, I put much discipline in place for the governance process. I said that the business had to end up driving the rate of return. As a result, IT developed a close connection to the business. In fact, in many cases, the business owners are the ones who represent these enhancements or these investments that we need to make.

EL. Since you outsource most of IT, what type of cost savings are you realizing?

RM. We would not say that cost reduction has been the motivation for our partnership with Dell. Dell is the expert in technology with a great deal of resources. We can pull from those resources as we need them. We can swap out people based on the projects we need to do. We just tap into that pool. It forces us to not hire and fire people. Our relationship with Dell enables us to continue to be the best and most innovative in our business relative to when it comes to technology. Dell has an ability to not only bring us the expertise, but help us to get that technology implemented and supported quickly and effectively. It also gives us the ability to shrink and swell as we need to as projects are in place or not in place.

EL. What is the process to update the business strategy and the role IT plays in it?

RM. Because we want to extend our systems and technologies to our customers and our suppliers, IT is an important part of the strategic planning process. That is where we see synergy with IT, in addition to the investment in our infrastructure.

Our senior management team has always held the belief that truly innovative technology can have a great impact on business operations. Of course, IT has to deliver collaboratively with the business. Our CIO is included at the management table during every step of a technology initiative - from initial discussion to post implementation.

The management team meets quarterly to update the business strategy. We also have a formal strategy process with our board of directors. We meet with the board's strategic planning committee at least twice a year and then we have an annual meeting with the full board once a year. Because no one is sure of the status of healthcare, we want to stay current with where and how care it is going to be delivered, and how technology is going to impact healthcare.

EL. What challenges have you faced because of the economic downturn and the Obama healthcare legislation?

RM. It is very difficult to comment on it until the Obama healthcare legislation gets carried out in 2014. The economy has forced our customers and our suppliers to look across their entire organization for efficiencies. That is where we come in. Our value is helping our customers and suppliers to be as efficient as they can be with their supply chain. It goes back to our Bill of Rights. If you look across those things, we have proven that we bring great value, drive efficiencies, and drive cost out for our customers and our suppliers. That has created many opportunities for us.

EL. What about growth?

RM. Our growth rate has been on target for the past couple of years. There are some acquisitions tied to this. I can only give you a historical viewpoint of it. We have been where we thought we would be for the past two years. This is from a revenue standpoint too.

EL. What new technologies are you looking at?

RM. Now that we our enterprise systems operate in a Microsoft environment, we will continue to extend our technology to our customers and suppliers via the Web. We are focusing on better user interfaces for all of our users and a better experience using our enterprise systems. We are focusing on business intelligence and effectively presenting our information in support of decision making, for our company, our customers, and our partners. We have had great success replacing our warehouse interfaces with voice recognition technology. We expect to do more of that.

EL. How do you work with the CFO and CIO to prioritize technology investments?

RM. Again, it comes back to the capital investment review process. Our CFO has laid out some easy-to-use tools for us to present internal rate of return and to show how we are going to monitor the achievements of each project. Our CFO is involved in helping us to put this stuff together, as well as holding us to some tight requirements of approving these capital investments. We meet regularly with the capital investment review committee to demonstrate how we doing against those measurements.

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

Sponsored by BMC Software

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“Vision Enactors” and the “Generation Savvy" with Sherry Lowry

tom@tomparish.com — Tue, 03 Aug 2010 06:00:44 GMT

(27:55)

In this podcast, Sherry Lowry-researcher, Business Mentor and Collaboration Coach-talks about a new group of people emerging in companies called 'Generation Savvy' and their impact on new socially oriented business environments in successful companies.

I bet you have known the following from personal experience: In every organization are people whose leadership emphasis is on getting things done effectively, gracefully and with authentic gratification from the work they do. The thing is, they often are not visible in the hierarchy. They capitalize on, rather than being frustrated or stymied by, differences in personalities. They epitomize follow-through and innovative ways to support talent around them by bringing into action each employee's greatest potential and distinctiveness.

To support her conclusions, Sherry Lowry has been formally collecting "evidence" since 2008, partly through observation and then through interviews, to identify more than 40 specific elements, behaviors, mind-sets, and demonstrated actions of people across five generations, who are, in effect - ageless. She believes we already have a group she says are "Generation Savvy" amongst us, operating seamlessly and successfully within every generation. These people are called Vision Enactors.

Bio:

Sherry Lowry, Business Mentor and Collaboration Coach

Building on the experiences of founding and developing 7 businesses within 7 different industries, the largest of which included 20,000 clients throughout North America, her current focus is on serving our most effective small to mid-sized organizational future-leaders, and identifying and documenting their qualities and behaviors.

She believes these are our vision enactors, both now and throughout all times in the past, across all generations, within all cultures, communities and families. They know what works, wherein talent resides, how to connect it to purposeful endeavor, and they are willing to run interference for those they help shepherd, be their primary encouragers or, if necessary, skillfully create and facilitate alternatives with them.

Her primary client base now and for the past seventeen years consists of company and organizational founders and decision-makers who are implementing and adopting positive changes and who control the budgets to execute these changes.

Never having had a client who needed a stronger weakness has led her to consistently focus on supporting companies to identify true and renewing strengths of their people, building upon and expanding upon those, and developing strategies to delegate or partner-up and collaborate on all else.

Part of her future will include building a virtual and live community for the creation of alliances and collaborations between these "glue and fabric" people who are the early adopters and so often the catalysts, creators and facilitators of our emerging work cultures of effectiveness.

For more about Sherry Lowry visit www.SherryLowry.com

Production Credits
Tom Parish, Host and Executive Producer

Corporate Strategist and Author Talks About How Pixar Innovates and How IT Can Benefit From It

bmc-elo@bmc-elo.hosted.jivesoftware.com — Sat, 31 Jul 2010 13:07:39 GMT

Buzz. Wall-E. Up. Walt Disney's Pixar is synonymous with animated films, which display creativity, magical stories, and unforgettable characters. Behind the fun of making these films, Pixar has a set of deeply rooted values that champion excellence, tap innovation, and encourage collaboration. Bill Capodagli, the co-author of Innovate the Pixar Way: Business Lessons from the World's Most Creative Corporate Playground, and co-founder of Capodagli Jackson Consulting, says, "These are just the starting points for pushing your own team or organization to unleash a Pixar-style creativity, innovation, and brilliance. From its humble beginnings in the 1990s, Pixar modeled its culture after Walt Disney's legendary studio of the 1930s. In fact, Capodagli has written one of the most authoritative books about Disney called the Disney Way. In deconstructing Pixar's success, Capodagli provides readers with a proven example of how an organization can cultivate innovative talent across all levels of employees and background.

Enterpriseleadership.org sat down with Capodagli to learn more about what fuels innovation at Pixar and how Capodagli's consulting practice applied similar techniques to technology-based organizations. Here is what he had to say:

EL. Why did you decide to write this book?

BC. I have been studying the Disney culture more about 30 years. I continue to speak on keynotes about Walt Disney's success. Pixar first came to our radar screen in 1995 when we were in the middle of writing the Disney Way. We watched this rather obscure boutique arise from being a subcontractor to Disney to replacing Disney animation in the late 1990s. Disney acquired Pixar in 2006 for a cool $7.4 billion. The Pixar president, the creative officer, and retired co-founder all admired and emulated Disney's creative genius. Pixar honors the legacy of Walt Disney by refusing to take short cuts and bringing the story to life in each of their movies. It lives by the simple formula that quality is your best business plan.

EL. What was your first-hand experience dealing with the Pixar folks?

BC. During the research of our book, Pixar was all consumed with the launch of UP, which ultimately got an Academy Award nomination for a feature film. We were fortunate to have one of the Pixar cofounders grant as much time as we needed to understand the inner workings of Pixar, especially how the organization was born in the spirit of collaboration and trust. We talked with other Pixar employees as their time prevailed. They shared with us some wonderful stories about the collaboration and this childlike playground Pixar has created.

EL. Can you describe some of the methods Pixar uses to innovation?

BC. The Pixar cofounders pioneered computer graphics technology back in 1974. The 1984 hiring of John Lassiter helped to bring all of the pieces together. Pixar's innovation brings technology and art together. John was an animator and the cofounders were these computer graphics technocrats. Walt Disney said when art and technology come together magic happens. That is really Pixar's secret and that is how it works today. Everyone at Pixar works in a collaborative environment. The technical people and animators work hand and hand.

EL. If I want to make my organization more innovative, what things can I take from the Pixar innovation model?

BC. The culture of collaboration is the missing key in most organizations. At Pixar, everything revolves around the story boarding, which Walt Disney created. In the traditional sense, it involves pinning up the story on the board and then starting to put the story together in that conceptual phase. Everyone contributes to the story during daily meetings. In most film companies, the executive producers, directors, and some of the executives preside over the daily meeting. Everyone participates in the daily meetings at Pixar. An open discussion takes place about how they can make what they are doing better.

The brain trust is another interesting concept. Pixar has a brain trust whenever a director or a producer decides that their stock needs some input. The process includes a group of eight directors and other they would like to invite to this meeting. During the brain trust, they present segments of the film and have a lively two-hour discussion about how they can improve it. The key to the brain trust is that there are no mandatory notes, and no mandatory action. It has absolutely no authority. The director and his or her team make the changes as they see fit.

EL. Does Pixar normally have many people seeking them out for their innovation methods?

BC. I am sure they have many people seeking them out, but they are like a closed set. They are not like Disneyland or Disney World where you can visit and observe the innovation, creativity, and the customer service. They do know welcome people in to observe the process. I have known many companies that tried to open Pixar's door.

EL. How does Pixar reward employees for outstanding innovations? Do they have a specific rewards system?

BC. We asked the co-founder about that. The biggest reward system these people have is that they can publish their findings and their methods in technical journals and speak at technical conferences. Technical people value this more than to monetary rewards.

EL. What is the Pixar education program about?

BC. Pixar modeled its education program after Walt Disney's eight-page, 1938 memo to Don Graham. Don was an art educator in the Los Angeles area. Walt wanted his animators to, not only be technically competent in drawing, but he wanted them to be creative when they got into the story. This memo outlined ways of doing education in music and comedy and storylines as such. The two Pixar cofounders had a copy of this memo and decided this was a good way to provide an education program to everyone in the organization. As a result, everyone in the organization can take up to four hours of educational courses on company time at Pixar University. It offers more than 110 courses. They say someone can go to Pixar U as a janitor and take enough courses to obtain the equivalent of a BS in filmmaking.

EL. Can you provide an overview of your managing consulting business?

BC. I have spent most of my professional career in management consulting. In 1980, my clients started asking us to benchmark the best-of-the-best companies. Disney would always appear at the top of the list, come up as one of the best of the best, not only in customer service, cut in areas of training, turnover, and even in production. Disney has the fifth largest laundry in the world. I have taken many clients behind the screen to Disney interviews. My firm has interviewed 1,000s of Disney employees. We started using Disney as a model for our consulting practice. In 1998, when we wrote the Disney Way, we did 90 percent consulting and about 10 percent public speaking and seminars. Because of the Disney Way, we spend more time doing the opposite.

EL. Where does the innovation initiative reside in many of your client companies?

BC. Our main thrust is to help our clients develop a culture of innovation. That means having a culture where you unleash the abilities of everyone in your organization. Walt Disney and the cofounders of Pixar believed that innovation comes from everyone in the organization. Because one person has the idea for a film, that person is not the only innovative genius. Rest assured that innovative ideas from everyone on the team went into making that film. Pixar promotes and encourages that. We have organization tell us that they cannot afford to have the Pixar-type innovators. We say that is not the case. 'You need to look at everyone in the organization as an innovator.' These people might not come up with the next Harry Potter novel or a flat screen TV. Instead, they need to be innovative about how they do in the cost-effective way to serve their customer. Everyone has input into that. Unleash that power on these things. We encourage people to do that.

EL. Does that include IT? Is IT a different animal from everyone else?

BC. I do not think so. Pixar has taught us that the technocrats and the animators need to work in concert. One person is no more equal than another person is. In many technical organizations, engineers and IT people reign super. The production people and other support people feel like second-class citizens. In other organizations, the marketing people might have that perception.

Sure, you can train people on techniques like storyboarding, or improvisation that help stimulate those creative juices. On the other hand, everyone has a stake in helping to make people more creative. The good ideas come from everyone in the organization. We found that many of the ideas, especially in large corporations, come from the front-line people who are trying things out and saying, 'Gee, this seems to work better than what is coming from corporate. You need to unleash that capability and have a culture that nurtures that.

EL. Are you saying that storyboarding can apply to other things besides filmmaking? Have you ever applied it to IT people?

BC. Yes. I have storyboarded with many IT groups. One large IT group wanted to install a large computer system in many locations throughout a foreign country. We brought a group of 30 IT professionals from all over the world to convene at hotel for a week. We started storyboarding by throwing ideas out to the group.

To prioritize things, we said, 'What are the first things we have to do? What are the plans? How can we put it together to carry out a materials management system throughout this large organization?' In turn, the group members put their ideas on a card, and then we posted the cards on the wall. It does not become that person's idea. The facilitator read all the cards after we presented the problem. We had a discussion around that. At the end of a week, we had this gigantic ballroom filled with cards, plans, and ideas that would have taken months to put together the comprehensive plan that emerged from this.

EL. Can you tell me more about what came out of that storyboarding?

BC. They started working on the implementation. They would meet quarterly and refine the plan-such as what barriers keep coming up? They would react according. What would normally take three years to four years to carry out took 18 months.

EL. Can you talk about another technology project you worked on?

BC. At Whirlpool Corporation, we worked with the global No-Frost team. It was very similar to this overseas IT team. The Whirlpool team had the task of designing a brand new no-frost refrigerator, along with a factory that could be built and produce products anywhere in South America. Normally, individuals from marketing, purchasing, technology, and such would meet and say, 'You go do this and you go do that.' After a week, they would go off in their own corner of the world. Every six months, they would get together and start putting the pieces together. This process would take about four years.

This team had a 20-month time period to get this project off the ground. Instead of doing it the traditional way, we worked with this team throughout their 20 months. They brought in individuals from all over the world. They had full-time representation in Indiana. Before they even began the project, we got together for an entire week of team building and planning. We did things similar to the IT team. We put strips of tape on the walls. We had cards and said, 'Now for January what are all of the things we need to do?'

This team came together with the common goal of getting this thing done in record time. The barrier with the organization broke down. When we had the entire plan up there, we asked everyone, 'What are the things you need to be involved in to make our goal of getting the plans for the factory and the no-frost refrigerator done on time?' We found that technicians were doing engineering tasks and purchasing people were saying, 'I could help with marketing.' Everyone looked at accomplishing the goal rather than trying to work in his or her own silo. We had great results. Despite a cut in the product cost half way through the project, the team still met all the milestones and deadlines.

Elizabeth M. Ferrarini is a free-lance technology writer. Reach her at elizabethferrarini@yahoo.com.

Sponsored by BMC Software

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Sam Curry, RSA's Vice President of Strategy, Talks about Doing a Better Job of Risk Management for Enterprise Information Security

bmc-elo@bmc-elo.hosted.jivesoftware.com — Mon, 26 Jul 2010 13:07:39 GMT

Because of the pervasiveness of the Internet, organizations of all sizes today need to be on high alert about potential security breaches, especially cybersecurity threats. Meanwhile, these organizations need to look at security risks that new technologies, such as cloud computing, pose. No one understands the security challenges that global organizations face than RSA, EMC's security division. Each year, RSA publishes its Security for Business Innovation Report (SBIC), which includes findings from 10 of the world's most accomplished security leaders from Global 1000 organizations. Enterpriseleadership.org sat down with Sam Curry, RSA's vice president of strategy, to discuss the invaluable lessons learned from these security leaders. Here is what he had to say:

EL. What are some of the enterprise security concerns about moving to cloud computing and virtualization and mobility?

SC. It is a risk reward equation. The companies in business accept some measure of risk for some return. Cloud computing can dramatically improve efficiency on the reward side of the equation. The important thing is the ratio between the two. At a high level, the main concerns are to achieve that same or better ratio of risk to reward. Generally, it means that people focus more on the risk. So how does the risk profile change? We wind up having to do better risk management, or at least the same degree of risk management. If the ratio to the reward improves, then it becomes compelling. The things that bubble up include security controls, such as being able to see into risk, and being able to show compliance in a cloud model as you would in a legacy environment.

To date, most of the discussions about security in the cloud have been around commonplace themes, such as dealing with the legacy world, and dealing with anti-virus concerns or firewalls. Those are really point things. The more interesting thing is that we have an ability to have makeover security. We have an ability to change the basic risk management and make it more of a tool. In other words, we can make the infrastructure a service to risk management as opposed to a thing that focuses on itself. The most important principles are that over time you focus less on the tool and more on the task. We can rethink things such as authorization and trust or governance and reporting.

EL. What can CIOs do right now to minimize these security risks?

SC. You need to be clear about the goals you want to achieve and then really enumerate the risks. Because risk management often proves negative, people try to lift out everything that could possibly go wrong. What is likely to go wrong is more important than what could possibly go wrong. I had a customer who said, 'I have so much to fear. There is no way I can sleep at night.' He was really asking for was a means to provide some granularity to that huge realm of everything that could go wrong.

First, you need to be clear about the clear. Second, really enumerate the risks, and then perform some disciplined triage. Look at the content of the entire world. Who are the actors? What can happen to you? There are all kinds of names for a program to this effect. Some folks like the name governance risk compliance or GRC, while some folks hate that name. The principles are similar. You should have a business policy and carry it out on your infrastructure -- whether you have legacy, public cloud, or private cloud. It should tell you what is happening, especially to the things you care about, such as risk and business goals like growing the top line, maintaining margins, and branding exposure. List it out, enumerate the risks, and build a GRC program (whether you call it that or something else). Do not forget to question your partners and their vendors on their ability to help with those goals on the risk management side.

Some will do it well and some will ignore it, hoping to distract you with the same old benefits statements you have seen in the past. Your risk management process has to become a manageable one with a program to make it something you can pass business policy to, something you can obtain status from, and something you can focus on the business drivers, not just reports for the sake of reports.

EL. What are some of the other types of security challenges CIOs face?

SC. CIOs usually hear about major mistakes, such as a system improperly deployed, long after they have occurred. CIOs need to make sure the organization has chosen business relevance for specific things in security. Some organizations still separate physical and logical security. That trend has become more and more out of date as an approach. CIOs need to minimize all risks to the business, such as someone about to drive a truck into a data center, someone hacking a system somewhere, or a potentially poisonous virtual system somewhere. I saw this recently with some of the public cloud things going on.

CIOs need to deal with an identity set of issues: How do you come up with a single model for identity? How do you deal with federation? How do you actually get a consistent notion of identity when you are dealing with lots of different islands of trust? Again, these issues include commonplace themes about sporting malware and filtering for bad traffic.

The more challenges you have in this environment, the more you have to manage your posture or your risk profile. You can think of risk in the classic sense as what can it do to you, and how do you match that up to where you are exposed, and then you need to go one step further, and match that up with what matters to you. Each one of those adds a new realm of value. What can happen to you is a big scary thing. You need a refinement process to look at where you are actually exposed and what is likely to get hit. This process includes things such as vulnerability assessments and configurations. It might also include something like an understanding of dynamic environment of cloud computing. It is not like the legacy environment where you say, 'We are 60 percent Windows. That is what we were yesterday and that is what we are going to be tomorrow.' Your makeup of just what assets exist in a cloud infrastructure could change radically. You might have one platform being 20 percent of your environment today and tomorrow it will be 80 percent.

Being able to understand the shifting nature of risk becomes important as you layer that onto a more dynamic environment. It is not like dealing with a situation such as international affairs where countries are static blocks and positions on the globe. You know their posture because you understand the physical space around them. This awareness does not apply to the virtual world of cloud computing. Here you need to show the business relevance of what is going on. You need to be able to do it in a much shorter period than most folks are used to. You need to be able to say, 'Here is the landscape and here is the state.' You also need to show the critical state. When state is not favorable, you need to know what the actions to take, who has ownership, and what path to workflow. Security has to become better at managing the controls, and as to be better at showing business relevance and tying into the business. These things should be the CIO's job.

EL. During 2008 and 2009, did we see more security risks at the enterprise level?

SC. That is a tough question to answer. The number of exposures or number of vulnerabilities that could be exploited went up. At the same time, many enterprise environments did a good job of managing security because of the solid systems they had in place. As a result, they became more effective in their defenses. It is fair to say that the sophistication and coordination among enterprises have improved. The actual things that can be done did increase the number of platforms. For example, the attention paid to finding the seams in the systems went up. The cookbook of tricks that are available to your typical hacker did increase, but that is not to say the risk increased. Companies paid more attention to managing policies and processes, and revolutionizing the way they treat information security.

I am in touch with many companies where security now reports to the CEO as an information protection initiative. In fact, some CEOs give their boards updates on information security.

If we accurately want to evaluate how the risk landscape has changed, we need to measure it more carefully. People became more aware of how to manage risk in 2009.

EL. Can you summarize some of the findings of SBIC report? What advice would you offer to C-level executives?

SC. RSA does this report. You can read the report and come out with many different takes on it. I can give you some of my takes. First, most users became aware of phishing. We expected that. When we compare the year-over-year results, we see more people in the population are aware of it. We saw a dramatic increase in the number of people who acknowledged themselves as victims in one sense or another. About 33 percent of the respondent acknowledged this. This surprised me. People were aware of Trojans, as well, which is surprisingly. That rose on their radar.

We checked for 10 security violations, including viruses, trojans, spyware, phishing, and worms. More than 50 percent of our respondents said they were aware of these things. This was the first time this passed the 50 percent mark. If I were to talk to my parents, one of them would know the meaning of each of these security violations.

Although we are becoming like a global village, I was surprised to see that respondents were similar in spite of different environments on all major continents. Some regions have visibly embraced security. Some regions have said this is an evolution. At one time, IT organizations could not let the company's security per se to show. Instead, they had to emphasize the security benefits of whatever the service they rolled out. Things have changed and we have a new tipping point. Customers want to see the security. They feel more confident when they can touch it, see it, and know it is there. Some regions have passed that point. Here in North America some industries have reached that point.

After we published our latest SBIC report, I give this advice on public blogs: You need to sit there and look for that tipping point. It may or may not be the time for you to start showing security. How do you put a padlock somewhere or send out something that is tangible or physical manifestation of security. You start thinking about when that is going to come. For year, I have talked about how the bad people work with on a ROI model. They have now moved to what we see on the business side of ROI versus costs. It costs money to execute an attack and expect people to deploy defenses and increase visibility. You can also expect the bad buys to pay attention to the 10 security violations such as voice phishing or botnots. Some times visible security can scare bad people off, and some times, it can inspire confidence in them. For your demographics, you need to know where are they and what do they need to see.

EL. As you know, President Obama appointed a White House coordinator of cyber security. What is your opinion on the state of national cyber security? How well has Homeland Security done its job?

SC. Just like private-sector companies, all types of government offices - be they federal or state -- should first establish the bar, build the instrumentation, and then determine the metrics. All of these things help give meaning to an event and help to determine how to improve these events.

It is wonderful that the mandate exists, and we have Howard Schmidt on the job. I, however, am waiting as a citizen and as an executive of a company that can help here. We have an interest in seeing what comes next. I am waiting to see to what degree they will do that instrumentation --- whether it will be the right approach with the right authority and the right budget. That will take a program with some phases. I cannot comment on the state of national cyber security, except that we do not have the right metrics yet, goals, or milestones. We need to build these things. Having the office is great. Now let us see what Mr. Schmidt does with it.

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

Sponsored by BMC Software

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The New Polymath – Audio Interview with Author Vinnie Mirchandani

tom@tomparish.com — Fri, 23 Jul 2010 05:03:54 GMT

(26:35)

Polymath — the Greek word for Renaissance Man — is someone who excels in many disciplines. From Leonardo da Vinci to Benjamin Franklin, we have relied on polymaths to innovate and find creative solutions to the problems of the day. How would these Renaissance men and women manage our current technology bounty? Which disciplines would they choose to focus on? Would they work on the architecture of next-generation green cities, or focus on nanotechnology?

The New Polymath is an enterprise that excels in multiple technologies — infotech,cleantech,healthtech,and other techs — and leverages multiple talent pools to create new medicine, new energy and new algorithms. Author Vinnie Mirchandani shares his varied experience as a technology adviser and market watcher to explain in business language the diversity of today's technology palette and to profile a wide range of innovations at:

Large multinationals, such as GE and BP,
Fast-growing, midsized companies, like Cognizant and salesforce.com,
The cleantech industry in China, on farms in Ireland, and along the back roads of Rwanda.

This book (available from Amazon) categorizes eleven "building blocks" for the New Polymath to leverage in its R-E-N-A-I-S-S-A-N-C-E framework, including next-generation analytics, cloud computing, sustainability and social networks. The author profiles more than a hundred innovators and demonstrates how they use these building blocks to solve both their individual, day-to-day issues and the "Grand Challenges" the world faces.

Brimming with examples from a variety of industries, countries and business processes, the book will inspire you to groom your own New Polymath tools, processes and ecosystem of innovation ideas.

Listen to the podcast to hear Vinnie's responses to the following questions:

After reading your book, I'm impressed with the approach you've taken. It's not simply a book of case studies with observations about what's common and what's not. You've dug deeper into a trend emerging that's people-oriented. In particular, it's an acknowledgment that many multi-talented people who don't fit into typical résumé profiles are solving big problems. I'll have to say I have a feeling of hope from reading your book. So for the audience, what is a Polymath and a Polymath company?
Give us a couple of examples of a Polymath company.
Why is this important to know now?
I like the title of Chapter 1: The New Polymath: In an Age of Wicked Problems and Technology Abundance. Talk more about why this was an important way to begin your book.
I noticed you make reference to the 'grand challenges' throughout the book. Why?
Chapter 17: What is the tie-in to The New Polymath (and Polymath Companies) with communities, crowds, contracts and collaboration? What is the relationship between the Polymath and Clouds: Technology as a Service? There was no specific mention of it in the chapter.
Let's talk about grooming your own Polymath - what are the steps for doing that?
I was particularly struck by your epilogue, The Beginner's Mind, because I've studied Aikido for years and that's its underpinning philosophy, which hasn't been all that popular in traditional business. Do you think this could be the fundamental characteristic of the Polymath and Polymath Companies that will be emerging in the new economy? If so, why?

Resources

The New Polymath: Profiles in Compound-technology Innovations, by Vinnie Mirchandani

Production Credits
Tom Parish, Host and Executive Producer

Eileen Slevin, CIO of New York Life Insurance Company, Talks about an IT Strategy for Ensuring Long-Term Success

bmc-elo@bmc-elo.hosted.jivesoftware.com — Wed, 21 Jul 2010 13:07:39 GMT

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.

Sponsored by BMC Software

We'd love to hear what you think. Send us your feedback.

Suzanne Bates, best-selling book author, Talks About Communicating like a CEO -- Lessons for CIOs

tom@tomparish.com — Tue, 20 Jul 2010 01:34:16 GMT

(18:08)

What do President Obama and Jack Welch have in common? They're both excellent communicators. Although they have different communications styles, they both know how to command attention and to get results. They also both know how to inspire and to motivate others. In her second podcast with www.enterpriseleadership.org, Suzanne Bates, CEO of Bates Communications, provides CIOs with some communications tips from her books: Motivate Like a CEO and Speak Like a CEO.

If you want to move up the IT ladder, you, undoubtedly, need to have good technical skills and solid business experience. On the other hand, if you want to earn that CIO seat at the executive table, your better hone your communications skills. You might start by going to amazon.com and ordering either Motivate like a CEO: Communicate Your Strategic Vision and Inspire People to Act! or Speak Like a CEO: Secrets to Commanding Attention and Getting Results. Suzanne Bates, the author, is CEO of Bates Communications, an executive communications consultancy, and a former award-winning television anchor and reporter.

When Jose Alvarez, president and CEO of Stop & Shop Supermarket Co. wanted to improve his communications skills, he turned to Bates Communications, based in Boston, Massachusetts. The firm offers everything from formal strategic communications consulting to executive presence seminars and workshops. Clients include Blue Cross Blue Shield, Dow Chemical, Fidelity, and Mellon/Bank of New York. Bates says that the company's mission is to transform leaders into powerful communicators who get business results.

She says that many leaders get promoted because of their business and technical skills. "When you reach the leadership of a C-level position, your primary role is to communicate the organization's vision, strategy, and values. You need good communication skills if want to inspire, to motivate, and to align the organization with the vision and strategy. Even middle managers need good communications skills. In many cases, communications is the missing link that holds people back from reaching their full potential."

During her 20-year year in television news reporting, Bates interviewed 1,000 of political leaders, CEOs, experts, authors, and celebrities. She says that some people were better speakers than others. After Suzanne started working with executives at Bates Communications, she realized that good communications skills aren't necessarily an innate ability. "It's something you can learn. Leaders, like Jack Welch and President Obama, have learned to develop their own compelling communications style. All writing and all speaking has to come from inside. Many executives struggle with bringing out their authentic voice. It takes practice."

In this podcast, Bates talks about what it means to speak like a CEO, what makes President Obama's communications style so effective, how CIOs can use good communications to maintain staff morale, and how gender differences in communications styles can affect your job performance.

Bio
For about 20 years, Suzanne Bates was an acclaimed news anchor and news reporter with major television stations: WBZ-TV Boston, WCAU-TV Philadelphia, and WFLA-TV Tampa-St. Petersburg. She won an AP News Award and was nominated for a Columbia DuPont Award.

In 2000, Bates started Bates Communications, an executive communications and executive coaching consultancy. In 2005, her book, Speak like a CEO: Secrets to Commanding Attention and Getting Results, topped the best-seller's list at amazon.com. The book is in its seventh printing and has been published in several languages. In February 2009, Bates came out with Motivate like a CEO: Communicate Your Strategic Vision and Inspire People to Act!

Bates has a B.S. in broadcast journalism from the University of Illinois.

Resources
The Benefits of Executive Presence, Bates Communications
http://www.bates-communications.com/articles/the-benefits-of-executive-presence.php

How to be Yourself in Front of an Audience, EmploymentCrossing
http://www.consultingcrossing.com/article/290165/How-to-Be-Yourself-in-front-of-an-Audience/

Suzanne Bates Delivers Message on the Power of Communication, HarBus - Harvard Business School
http://media.www.harbus.org/media/storage/paper343/news/2006/02/06/News/Suzanne.Bates.Delivers.Message.On.The.Power.Of.Communication-1598986.shtml

Production Credits
Tom Parish, Host and Executive Producer

Audio Editing by Doug Marcis

Sponsored by BMC Software

We'd love to hear what you think. Send us your feedback.

Mansfield Oil's CIO Talks about the Business Value of Having an Agile Technology Infrastructure

bmc-elo@bmc-elo.hosted.jivesoftware.com — Fri, 16 Jul 2010 13:07:39 GMT

With $5.2 billion in annual revenues, the privately held Mansfield Oil operates as a recognized leader in the downstream energy industry in the United States. Each year, this company delivers more than two billion gallons of petroleum products to commercial customers and government customers, such as United Parcel Service, the U.S. Army, and retail gas stations. In fact, these customers combined account for 30,000 different destinations or individual fuel sites that Mansfield has to replenish.

Some of the factors that account for Mansfield's success include a thorough understanding of the industry, a commitment to improvement, and an adaption to market changes. Building an agile technology environment, however, resides as the unpinning for all of the factors that enable the company to operate profitability with 5,000 employees, including less than 50 employees in IT. Doug Haugh, Mansfield's CIO, says ," Our technology helps us to do two things - think about the best physical logistics to minimize freight costs and maximize service levels for our customers, and to operate against the world's deepest and one of the world's most volatile commodity markets."

Staying competitive in an industry weighed down by dependency on fossil fuel has propelled Mansfield to get a jumpstart in the renewable energy industry. In 2009, Mansfield acquired the $700 million C&N Companies, a renewable fuel marketer representing annually 500 million gallons of ethanol production and 150 million gallons of biodiesel production capacity. Haugh says the company's agile technology environment made it possible seamlessly to fold an acquisition's business operations into Mansfield's business processes, financial systems, and network infrastructure.

Enterpriseleadership.org recently sat down with Haugh to learn how Mansfield's technology environment can deliver much business value to an organization that needs to meet market challenges around the clock. Here is what he had to say:

EL. Can you briefly describe how your business operates and what role technology plays in it?

DH. Each day, we deliver transportation fuel, such as diesel fuel, for our commercial customers and government customers. We have a smaller component of industrial fuels and power generation fuels. In essence, we move fuel from point to point. The United States' fuel storage space today has about 1,300 bulk product terminals where barrels are stored as the refineries make them.

When it comes to technology, we use remote telemetry to monitor those inventory positions for our customers. Using a variety of decision support and automation systems around our supply chain management function, we can determine how we should react to the remote telemetry reading. For example, say you oversee a UPS site in the middle of Montana. You have 4,000 gallons in storage and use 600 gallons a day. Your facility is one day away from the nearest supply terminal. We have to factor in led time. Our decision support systems goes through that entire algorithm and figures out how much fuel you will need on, say, Friday.

Physical replenishment is something we routinely execute as part of our supply chain and logistic process. On the other hand, we need to keep a constant eye on the commodity market because it moves up and down every minute. We use technology to work against that commodity market on behalf of our customers and continually extract the best opportunities. We know they are going to need 100 loads of fuel in the next 72 hours. We are constantly looking at when is the best optimal time to make that purchase and deliver it to their locations in that market.

Our deals are very transparent. Unlike a commodities broker, we work within the commodities market on a trading basis to extract value for our customers by trading the best we can. We work very much on their behalf. While we deliver fuel in the traditional sense, our customers, however, hire us because we have the technology scale to optimize that supply chain for them. A nationwide company, such as UPS, does not have the energy procurement experts to maintain their own supply chain and logistics for fuel consumption and delivery. We provide the roomful of energy experts who know how to execute a customer's plan.

EL. Can you be specific about the types of customers you have?

DH. We have three main categories of customers. About 30 percent of our business comes from the federal government and state government. For example, we supply various fuels to close to 200 military bases across the country. We might supply fuel to a school district. Another 20 percent of our business includes the traditional retail business of supplying gas stations. We also design, construct, and operate gasoline stations with mini-markets. We do that for a couple of different grocery chains. The rest of our business comes from nationwide commercial customers, such as UPS, Ryder, FedEx, and Waste Management. If these companies do not get the fuel they need, they cannot operate.

EL. Can you describe your IT organization?

DH. We provide both infrastructure support and applications development. We develop and maintain our own ERP system and trading and logistics systems. Throughout our 50 years history, technology automation has been one of our main drivers. What we do is unique. Because there is not a wealth of software for what we do, we have had to build our own backoffice platform. We also developed our customer-facing solution in-house. In both cases, we have relied on external development partners.

EL. Can you describe some of the changes you are making to these systems?

DH. We are now taking all of our proprietary modules and transitioning them to very rich, graphical-based Web 2.0 applications based on the Flex architecture. It sits within a Sharepoint delivery framework. That technology directly touches our customers 1,000 of times a day. As a result, they have transparency into their entire supply chain. They can see all of their tanks remotely distributed across the country. They know how much fuel they have, and how fast they are using it. They can look at all of their invoices and bills of lading. This information helps them to determine, for example, if they need to run a report in order to book an accounting accrual for a delivery in transit, but not listed in the inventory. We have put all of our decision support systems online and presented them to our customers in our Web solution. We developed and deployed it, and we maintain it ourselves. We remotely monitor over 10,000 sites through remote telemetry nationwide. We support about 6,000 users. That translates to1000s of logins a day to that customer system.

EL. Can you explain the necessity for agility in moving into new markets?

DH. Agility is important to us. We have to be fast and opportunistic. Our industry is changing at a faster pace than it ever has. We are a 53-year company that grew up in a 100-year old industry. Fossil fuel is on its way out. It will take a 20-year transition, if not longer. Within a decade, ethanol has captured a 10 percent market share. Nothing has ever done that in the past 100 years. Because we want to be a part of that, we acquired C&N, a $700 million company which produces a half billion gallons of renewable fuels annually. This strategic acquisition provides us an entry point into a growth business.

Biofuels and renewable fuels will continue to grow. On the other hand, if a company like C&N is going to be a leader, it needed our strengths in logistics, marketing, and distribution. C&N has been highly successfully in producing this type of fuel, but it had not done a good job of integrating that production efficiently into the existing supply chain. That is the key to cost competitiveness, overall efficiency, and ultimately to sustainability of that industry itself. We need to leverage what we know. To this end, we can take that ethanol and biodiesel business, and operate its logistics, distribution, and marketing within our traditional processes. We have already spent billions of dollars optimizing these processes.

EL. Are you saying that you are going to apply your existing business processes and technology to C&N?

DH. Yes. Like most processes, we go in and do a gap analysis of our practices to theirs. We compare those business processes, and we do a gap analysis against the technology capability we have. We determine what changes in business processes can permit the adoption of our current technology. Next, we look at what remains, and decide how to close the gap with development. That process is coming to conclusion now. We are finalizing the new capabilities that are necessary to accommodate the differences in the renewable fuel business versus the traditional business. There are more rail logistics in the renewable fuel space than in the petroleum space. Most of the petroleum products in the United States move via pipeline not rail car. Because it is a different mode of logistics, there are impacts to how transactions are handled and how forecasting occurs. These things occur all through the entire technology stack.

EL. Can you give me an example of how you plan to integrate C&N?

DH. It is going to be similar to a $1 billion acquisition we made in the spring of 2008. We completely took that business, lifted the master data, customer data, and transactional data; transformed it; and dropped it into our existing transaction platform and accounting system. We then executed the business plan.

When we do an integration project, we integrate that business into our business. We do not integrate the technology. We typically throw away what was there, and we operate that business on our core systems. This approach enables us to derive the ultimate efficiency we enjoy in the core business. Our reason for making an acquisition comes down to how well we can apply our strengths and technology capabilities to that business and run it more efficiently. We cannot accomplish this if we have to work with is there and just pipe in financial data to a combined balance sheet. That approach does not accomplish anything.

We get right at the core starting with the network all the way up through the applications stacks to the phones. We have put in our own network framework of technology which we gives us the network reliability, redundancy, and dynamic routing that we need to make many of our systems works. We work from there up. We bring their transactions and their actual processes on to our accounting and business systems. We then move on to our phone network. Their phones operate as extensions of the main office. If one entire fuel office goes down, those phones will immediately roll to their backup. A customer has never experienced an interruption.

EL. To what degree do you evaluate an acquisition's systems?

DH. If a specific system has given the acquisition a unique competitive advantage, well by all means, we will carefully evaluate that system. Ultimately, our only decision comes down to whether or not we can derive enough unique business functionality from that system, and whether or not we can develop it within our core infrastructure. We never ask ourselves whether we should keep an acquisition's old systems. If we did that, we would have a hodge podge of systems that could put a damper on our entire technology strategy. Our support and maintenance costs would increase. We would prefer not to invest our IT budget dollars on maintenance, but on new developments that can drive competitive.

EL. How do you arrive at the decisions to develop the technology you need? Does it start from the top or the bottom?

DH. It really is both. We have a feedback process. We have probably five suggestions a day from the floor. We operate in a very open trading environment. We do not have cubes any more. There is a ton of encouragement for a better, faster way to do something. We try to instill a culture where we have no boundaries. If multiple steps and system inefficiencies cut into your core business productivity, then our employees have a responsibility to table that issue and demand a solution. My staff has the job of continuously ranking these tasks and working through them. High priority items typically have the largest returns attached to them. We rank those by dollar value. For example, if we make that change, how many hours of labor do we eliminate, how much productivity do we pick up, and what is the financial implication of that?

EL. What is your governance process?

DH. Our technology team operates with executive sponsorship. We continually allocate a minimum of 25 percent of our development capacity to continual work against those new opportunities for productivity. The technology team is responsible for evaluating the business case, making the selection, executing the development, and deploying that back to the user group. Self-direction helps to inspire the technology team. On the other hand, senior management regularly inspects what the technology does and holds it accountable for its works.

Apart from that, we have a group of senior executives who look at the things beyond the horizon that will not bubble up from the existing business. In other words, as we engage in these new lines of business, such as biofuels, we need to have a different perspective. For example, we might say, 'What are my technology requirements going to be? What are the opportunities to deploy technology in a game changing fashion to become more competitive?'

This brings up the other part of the C&N acquisition. We are not only integrating and assimilating the core technology platform end to end, but at the same time, we are developing a completely new customer facing solution in our Sharepoint portal framework. This highly collaborative solution has joint forecasting and planning with our production plants transparently exposed to the customer. This a cutting-edge approach to supply chain optimization. No one in that industry has ever done that before. Until now, companies like C&N have communicated this information to customers via paper reports. Things, such as when did my rail car leave and when does it arrive, have not been reported in real time. This new technology development requires a different type of governance. My most important job right now focuses on looking over the horizon and seeing what is going to make a competitive difference, and how much we can be afford to spend on the business case to achieve bottom-line results for that competitive e differentiator.

EL. So how would you evaluate the effectiveness of a strategic technology investment?

DH. We look at technology two ways: We have to continue to drive efficiency in our operations. At the same time, we try to launch at least two new applications modules each year. It usually includes a new functionality that touches our customers directly. It is a revenue generator. We have revenue objectives for technology directly. They usually translate into a product or service such as a service fee, or an up-charge, or a discrete sale. We have customers that buy the services of our technology platform and not our commodity fuel. We still see this type of a relationship as a good entree to the customer, and we are happy to defray our investment costs with that.

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