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Premier 100 IT Leaders: Earning the rewards of risk-taking

IT leadership can be a high-wire act of managing game-changing projects at high speed. Here's how the Premier 100 make it work.

Editor's note: Each year, Computerworld's Premier 100 IT Leaders awards program honors the best and brightest IT executives. This year's class of 100 men and women are especially unique, in that many have made their marks by successfully executing on bold, high-risk decisions that are yielding big business benefits.

Explore the full package by viewing the listing of this year's honorees, along with their photos, predictions, cool projects and more. This year's class joins a fellowship of hundreds of Premier 100 alumni listed here, each of whom has demonstrated exemplary leadership qualities throughout their careers.

To launch your own successful IT management career, check out the best management advice from Computerworld's editors and learn more about the 13th annual Premier 100 IT Leaders conference, which draws together these IT leaders alumni and other top IT executives to network and exchange ideas.

A little over two years ago, GlaxoSmithKline's new president revamped the pharmaceutical maker's North American operating model, triggering a massive business and IT transformation. Changes included shifting from a product-centric view of the business to a customer-centric approach, re-engineering the sales and sales incentive processes and revamping all systems that support those processes. Other initiatives involved equipping salespeople with iPads and mobile apps, and dismantling the centralized IT organization to embed tech experts in various business departments. From start to finish, the whole revamp took 15 months.

"IT has to keep pace with the clock speed of business," says Joe Touey, senior vice president of IT for North America Pharmaceuticals at GlaxoSmithKline. "You can't say it will take two years to get there if the CEO wants to transform in six months."

Making big changes is always risky, but doing it at breakneck speed is especially perilous. Yet, that's precisely how so many of this year's Premier 100 IT Leaders are making their mark -- by quickly and successfully executing on bold decisions that are yielding big business benefits, thanks to rigorous attention to detail, expert risk management and unparalleled leadership skills.

"The big game-changer events have the highest risks," says Mary Gendron, CIO at Toronto-based Celestica, an electronics manufacturing services company whose customers include Cisco, HP and IBM.

Among Gendron's high-risk/high-reward moves in the past 18 months was the decision to opt out of using a commercial software system as the company's manufacturing execution system (MES) -- the lifeblood of Celestica's worldwide operations. Instead, Gendron empowered employees to create a custom MES using open-source software, even though Celestica had never before attempted an open-source approach to software development. There was also the risk that shop-floor production would halt if the homegrown software failed.

Yet, as Gendron saw it, "in the area of shop floor, we are the experts. Our ability to build and develop an application that is agile, flexible, nimble and accommodating to over 80 customers' shop-floor requirements is our differentiating capability," she says. In her view, it was precisely the right moment "to double down on custom software."

First, Gendron and her team set up a social networking system to link all shop-floor locations around the globe. A Celestica software team in Thailand managed the development, with developers contributing from Celestica sites worldwide.

"The world is changing at an incredible pace, so ideas and concepts can come from anywhere. We have to embrace all of these ideas to learn what is successful and then translate that to Celestica," she says.

The result: a highly nimble system that is updated every 10 days, as opposed to once a quarter -- as was the case with the old MES. The project has also delivered a significant financial impact, driving more than $3 million out of Celestica's operational costs. Moreover, it will continue to yield more than $1.5 million in efficiencies year over year, Gendron notes. Additional financial savings are realized through reduced training costs as a result of the shared global platform.

Integration

It's Deja Vu as IT Centralizes

Changing business priorities, a need for new skill sets and a desire to more tightly integrate IT and the business are key factors driving a significant number of IT leaders to shake up their IT departments.

Complete organizational overhauls are not uncommon.

"We did a complete redesign," notes Todd Coombes, CIO at CNO Financial Group. "Once we had our strategy figured out and it was aligned and integrated with the business, it became clear that our IT organization needed to change to fit the new strategies. More than half of the entire IT staff ended up having a different VP to report to, and more than one-third of the staff have a different direct manager."

Centralization and standardization are the major themes behind the moves, Coombes says. Before, for example, testing teams were affiliated with the applications they supported. Under the new design, all testing teams have gathered into a single group.

"We wanted to enhance our ability to do testing one way instead of having a lot of different approaches to the same thing," Coombes explains.

At Target, CIO Beth Jacob reorganized IT so that staffers are now centralized into functional groups rather than scattered among different teams supporting various parts of the business, such as merchandising and marketing.

"Instead of having what were many organizations, we pulled people together," Jacob says. "Now, all of our architects work together, which allows us to take current plans and knit them together into multiyear road maps. This way, we can identify the best places to leverage technologies and take out redundancies," she says.

-- Julia King

What became most evident throughout this project was that innovation is best nurtured through collaboration, Gendron says. The open-source approach to MES dramatically increased employee engagement across all of Celestica's sites through new collaborative tools and agile development processes. That, in turn, has spurred an energy that has led to more process improvements across diverse customer requirements, Gendron says.

"It was a big risk in some people's eyes," she adds, "but for me, it was a calculated risk and one worth taking."

Rigorous Planning

Two key factors in virtually all IT leaders' risk calculations are the breadth and the scope of a project. Both are colossal for Lenovo CIO Xiaoyan Wang, who is leading an ongoing effort to migrate all of the No. 2 computer maker's legacy IT systems to a single, standardized SAP platform worldwide.

Wang's first principle is that IT will never provide a 100% solution. Instead, "we need to prioritize, first focusing on the critical capabilities for running the business. Enhancements are secondary," she says.

Her second principle is that "schedule is king." Making this a day-to-day operational reality involves working hand-in-glove with the lines of business, securing agreement up front on both change management and deployment plans.

"The businesses are intimately involved from the blueprint and planning phases all the way through to post-production support," Wang says. "The impacted businesses have to take ownership with IT on disciplined execution because we are building their future and because any missteps would impact our company's results," she says.

In cases where project risk is especially high, Wang uses a pilot program to test the strength of a system before launching globally. "Large-scale change takes time and must be approached with rigor and attention to detail," she emphasizes. "It also takes time to acquire the unwavering support of the business."

Still, Lenovo has set an ambitious deadline for completion, which is now less than 18 months away. The most recent deployment, which focused on transitioning Latin America to the new IT platform, successfully launched in January 2011.

"We studied many other large-scale ERP deployments to this region. All of the companies we looked at across industries split their Latin America deployments into several phases, due to the complexity of the business processes and business environment, especially around taxes and export/import [issues]," Wang explains.

But Lenovo's business imperatives leave no time to spare. "Taking the conventional route would have added at least one more year to our transformation journey -- time that we could not afford," she says. "Instead, with careful planning and strong top-down support for change and disciplined technical execution, we were able to execute in 12 months."

Risk Reduction

Changing Up Change Management

Not all risks are technical. IT-enabled business transformation involves people, and working with people involves risk -- especially when those people are notoriously change-resistant IT professionals.

To address the issue, IT leaders are tapping into some new ways to make change easier on their teams.

Lenovo, for example, has adopted a very structured and methodical way of orienting new IT employees that includes a process known as Fu Pan. In Chinese, Fu Pan means "replaying the chess game," which teaches employees to analyze their past performance and identify ways to improve in the future, explains CIO Xiaoyan Wang. "This works to reduce risks because the team is continually learning and growing," she says.

At State Street, IT standardization is turning out to be a critical success factor in easing the challenges associated with change management, says Kevin Sullivan, chief architect.

"The adoption of a standard platform and methods across the global IT operation has allowed [us] to move resources from one project to another without the addition of risk because [employees] do not need retraining," he explains.

"If a programmer is working on one system and you need to change their assignment to a different system, they can get up to speed much faster and with a lot less risk of making mistakes if they already know how the system is built," says Sullivan.

At Kraft Foods, CIO Mark Dajani is emphatic that technology is not the biggest risk factor the company faces in huge integration projects related to its acquisition of Cadbury. Instead, he says, "the biggest risk I have is making sure people are with us on this journey and we get into productivity as soon as possible. These big projects can be expensive and delay will cost a lot of money and business disruption."

Dajani says the IT organization needed to work in entirely new ways to be successful. So it changed just about everything, including its goals, how it works and how employees are measured against the newly-set goals.

What Dajani wanted to do is relate IT's work directly to Kraft's overall business goals and performance.

"One small example is when we brought in telepresence technology and I told the team their new job is not to install or repair telepresence technology, but to ensure highly productive meetings across geographies," Dajani explains. "Once you get the light bulb going on about what their jobs are about, things start to change. It's all about outcomes-based conversations and getting to a different mindset."

Now, he says, a concept of service leadership has taken firm root in IT at Kraft. This concept is perhaps best exemplified when someone from IT is called in to troubleshoot a problem with a PC or perform some other support task. "IT is there to repair the computer problem, but now, they will also teach you four or five things you didn't know before you called in IT," he says. "That's service leadership."

-- Julia King

An added business reward: The Latin America IT migration created efficiencies for Lenovo's Idea product group and deployed strategic sales tools globally. Plus, it created a better cost forecast and pricing solution, Wang says.

It's also worth noting that the Latin America migration was just one of three major system releases in the past two years, all of which were delivered on schedule and within budget. And despite the cost of the large-scale transformation project, Wang says Lenovo's overall IT spending as a percentage of revenue had dropped from 2.8% in 2008 to less than 1.5% in 2010.

Kraft Foods CIO Mark Dajani also relies heavily on disciplined planning as one of his key risk management and mitigation strategies.

"Big changes require more upfront planning, contingency planning and rehearsals," he says. For example, throughout the integration of Cadbury, which Kraft acquired in 2010, Dajani and his team have had layers and layers of contingency plans in place to address potential glitches.

"The big projects can be very expensive, and delay will cost a lot of money and business disruption. When you think about what could go wrong, planning for it is much easier ahead of time than at go-live time, especially in the areas that impact customers," he says.

One example: During a system cutover in Europe last summer, one of the data feeds didn't make it to a central warehouse. The negative impact was minimal, however, thanks to an in-place contingency plan to automatically ship 30% more product to that warehouse in the event of a problem.

Dajani says he also relies on a finite group of carefully chosen vendor partners, which he has incorporated into centers of expertise.

One of his riskiest business decisions was where and how to build and staff Kraft's shared service centers, which house the services that are common across all Kraft business units worldwide.

"The technology, the business processes harmonization and the ever-consolidating world are really changing how we can deliver services to our company," Dajani says. "My biggest learning was that there is no perfect decision and that timing in this changing world is not on your side. So, go ahead and make a quality decision with an appropriate time frame, and be prepared to adjust and change as you go," he advises.

Creating Win-Wins

Successfully working with trusted vendor partners also means "you have to think beyond outsourcing," Dajani says. "Our intention is to make sure our supplier is successful as well. But I also demand a lot. I have to work with them to change their old structure and not just rub them off for a dollar here and there."

One of the most recent ecosystem collaborations is a private cloud built for Kraft by HP. "I know the world is changing, and my goal is for [our vendor partners] to be better at what they do and I want to be the first customer," he says. "I push them to innovate."

Jim DiMarzio, CIO at Mazda North America Operations, says he teams up with vendors to tap into skills the company doesn't have in-house.

For example, "we found a vendor to help us on an iPad mobile application project because we had no skills with iPads," he says.

GlaxoSmithKline's Touey also believes in the power of partnerships, but his strategy is to stick with only the largest vendors.

Prior to the transformation launch at GSK, "we had a culture of building everything internally with .Net, Business Objects and Java. We bought a lot of servers, which is costly and makes it very hard to make changes," he says.

Now, by contrast, "we innovate by continuing to build strategic relationships with Oracle and IBM. There are a lot of vendors out there selling cloud and SaaS, but our strategy has been to play with the big boys. I'm not one to jump into the cloud with a midsize company," Touey says. "If they really have something, they're going to be bought up by the big guys. You have to be very judicious in terms of who you pick as your partners."

In contrast, Target CIO Beth Jacob took a huge risk in cutting ties with the giant retailer's big cloud provider, Amazon, to build and launch its new Target.com website on its own technology.

"Given our size and scale and that we want Target users to have a consistent experience, we made the right decision," she says. "We put our No. 1 priority -- multichannel retailing -- on our own technology."

But that's not to say it all went flawlessly. In the first few months after the new site launched in August 2011, there were at least three different outages. Yet, Jacob says the business rewards of building and hosting the site in-house far outweigh the "early bumps in the road."

"We've built huge insight into our capabilities and into our guests, which are both key to the future of multichannel retailing," she says.

Target IT is also a learning organization, and those early outages provided valuable new knowledge and experience. "If you're going to innovate, you have to be committed to learning, too," she says.

Jacob emphasizes that the new website was a project of unprecedented scale, with more than 1,400 people working on it at its peak. "It was one of the biggest e-commerce projects in history," she notes. Nevertheless, it took just two years to complete.

"From a decision-making standpoint, speed forces you to be crystal-clear on the priorities of the organization," Jacob says. "We have very clearly defined initiatives that are shared by the entire company. It's that clarity that helps us be faster."

Doug Porter, CIO at Blue Cross Blue Shield Association, says he recognizes the value of innovation and learning, and he's committed to giving IT staffers time to experiment, learn and innovate. Most likely, he says, "we'll land between having dedicated innovation days or allowing some percentage of staff time to be used for innovations that the staff feels need to be made."

As Kristin Russell, CIO of the state of Colorado, sees it, calculating, managing and taking risks are part and parcel of innovation. So is failure. "If you're not willing to take risks because of fear of failure, then you're not evolving and innovating," she says. "We don't learn from successes in life. We really only learn from failures."

Russell moved to state government from a rewarding private-sector career as an IT executive at companies like Oracle and Sun, and she's no stranger to success. In many ways, she says, her biggest risk recently was making the move to public service, which came with a significant pay cut and a distinct absence of executive perks.

But she is intent on capitalizing on her experience in the commercial software industry to improve state government services. One of her first big initiatives is to create a systematic way to mitigate the risks associated with the state's many antiquated computer systems.

She wants to create a risk index, based on factors such as information security and the number of citizens a system impacts, to prioritize the order in which systems should be replaced.

Russell is also exploring several novel business and IT concepts, including collaborating with government officials in neighboring states to create a shared storage cloud. Another idea is to funnel state research and development funds to a private company to build SaaS systems, which the state would own and which other states could use for a fee.

"Some people see it as blasphemous and totally risky, but in my mind, what I'm trying to do is remediate risk with alternative solutions," Russell says.

"It all comes down to the freedom to fail. Fail first, fail fast, fail often and recover," she says. "The way I look at it, nothing is not correctable. We can correct a bad decision, but we cannot correct indecision."

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