With one year's experience under their belts, these three senior executives thought they were prepared for any crisis. They were wrong.
Since September 1997, CIO has tracked the careers of three newly appointed CIOs. This segment revisits them to see: Their latest accomplishments and setbacks How they've met their companies' and their own expectations Their next challenges In retrospect, perhaps we should have called this series "Hard Times." Because even though the CIOs we've tracked for the past two years have risen up to meet great expectations - their own, their bosses' and their peers' - none has had an easy time of it.
At Levi Strauss & Co. the IT organisation is more effective than ever. Yet the business is struggling, and CIO Linda Glick is under tremendous pressure to show maximum return on Levi Strauss's IT investment.
David Cooper faces entirely different pressures at Lawrence Livermore National Laboratory. As the lab's first CIO, he has streamlined systems and information flow and helped trim more than $ US12 million annually from the lab's IT budget. But off the job, Cooper aggravated an old back injury and may have to choose between major surgery or early retirement.
And then there is Jonathan Fornaci. When we first met this young up-and-comer in 1997, he was CIO of Genstar Container Corp. But last year Genstar merged with an industry rival, and Fornaci left to become CEO of Ibis Consulting Inc., a sassy Internet systems integration startup that seemed perfectly suited to the restless executive's enthusiasm and expectations. Yet Ibis, in turn, was acquired by another firm, and Fornaci is starting over for the third time in as many years-this time as COO of a startup software vendor.
From the outset of this series, we knew the plots would take unexpected twists.
And we have come to realise that great expectations never end; like business itself, they constantly evolve. These executives can occasionally stop and enjoy a momentary triumph-a Y2K fix today, a staff reorganisation tomorrow-but there is always a new challenge to overcome. In the following updates, learn how Glick, Cooper and Fornaci have responded to the past year's challenges and how they've adjusted their expectations for the future.
Linda Glick had a great year. Unfortunately, Levi Strauss & Co. did not.
Glick was on a roll in 1998. She led her IT group to lick 95 percent of Levi Strauss's global Y2K problems, to begin rolling out a common IT applications suite in Europe and to create a Web-based application to support the company's newest custom jeans service.
But business was horrible. Already reeling from a disappointing 1997, in which sales declined for the first time in a decade (by 4 percent, from $ US7.14 billion to $ US6.9 billion), Levi Strauss was further pummelled in 1998 by a jarring 13 percent slump that saw sales dip to $ US6 billion. Global economic crises in Asia and Brazil are partly to blame for the company's losses, but executives are also frustrated by a weakened worldwide demand for Levi's jeans.
Teens have always been a target market for Levi Strauss, but suddenly young people are flocking instead to rival brands such as Guess and Tommy Hilfiger.
In the face of these struggles, Levi Strauss is trying to get leaner and meaner in the marketplace. The company recently announced that it will close half of its 22 manufacturing plants in North America, resulting in a 30 percent reduction of its U.S. and Canadian workforce. Senior executives are brainstorming how to regain lost market share. And Glick, who has tried for two years to get her IT group up to speed with the old business strategies, now finds herself helping to plot the new.
Delivering to the Customer
Historically, the Levi Strauss IT organisation has been internally focused, building new applications and networks to improve workflow among employees. The imperative now is for the company to get closer to its customers and deliver systems that give them greater access to Levi Strauss products. It's a new role for Glick, but she likes it. "There's a buzz in the building now," Glick says.
"This notion of getting to know our customers is very exciting." Linda GlickSenior Vice President & CIOLevi Strauss & Co.
Background: A 23-year veteran of Levi Strauss, Glick was appointed CIO in late 1996. In her first year as head of the information technology organisation, Glick tackled the Y2K bug and began building partnerships with her business-side peers.
Begin European ERP rollout
Develop new electronic commerce initiativesLeverage the IT group's worldwide resourcesSecond-Year ResultsHelped develop new customised jeans serviceBegan major worldwide IT reorganisationFuture ChallengeHelp Levi Strauss rebuild its ailing businessIT has begun to meet its mission with a revamped Web site (www.levi.com), which allows consumers to browse and buy premanufactured jeans online, and with Original Spin, a new iteration of Levi Strauss's Personal Pair service.
Personal Pair, introduced in 1996, allowed customers to have their measurements taken at Original Levi outlets where their orders for custom fit jeans were sent via the Web to manufacturing facilities. But where Personal Pair was for women only and available exclusively at Original Levi outlets, Original Spin targets men, too, and is also available at major department store chains. Glick is encouraged by these early customer-facing initiatives, in which IT had a hand. But to effect change, she must give up some old projects and embrace some new, and organisational restructuring is now her top priority.
Refashioning the IT Organisation
Up until now, IT has been decentralised globally into three autonomous divisions: North America, Europe and Asia. Within each division, IT has operated in service of, but not in partnership with, the business offices. In Glick's new global restructuring, all three major IT organisations are under her direct control, and she is fully accountable for all technology decisions.
IT staffers worldwide are being redeployed to work side by side with business partners in design, marketing and other business departments, and IT leaders report to both IT and their respective business departments. Glick wants her employees to be internal IT consultants, helping business executives articulate and fulfil their technology needs. Therein lies the next challenge: putting the right people in place. Companywide, Levi Strauss is reducing its operating budget by about 20 percent this year. But Glick must still promote and hire people to fill key roles.
Glick is also embarking on an IT standards campaign to create a companywide technology platform. So far, she has succeeded in moving Levi Strauss from five different e-mail applications to one. She hopes to have equal success with desktop systems and networks.
When Glick was first appointed CIO, she inherited an IT group viewed by many senior executives as pure expense. Glick made it her mission to develop a set of metrics by which she could prove IT's return on investment. So far that goal has eluded her. "It's hard to explain," Glick says. "A million dollars in IT-what's it relative to?" Still, Glick has made positive impressions upon her business peers. "The IT organisation is leaner, more focused and is gaining increased understanding and credibility at the board level," says Levi Strauss President and COO Peter Jacob, who has been Glick's immediate supervisor and longtime confidant. But Jacobi recently announced his forthcoming retirement, leaving Glick to deal not just with changing times but with changing leadership. Not that she's too concerned. "I've had lots of bosses in my career; this is a chance to meet another one," she says pragmatically.
Tailoring a Legacy
No one anticipated the tough times that have befallen Levi Strauss, but the real surprise for Glick is how her CIO responsibilities consume her thoughts.
"That's the big 'aha' for me," she says. "The job isn't about how many hours you spend in the office or how much time you spend answering e-mail from home.
No matter where I am, there's always some kind of constant thought about work." While Glick, now 51, is hardly ready for retirement, she can't help but think about her legacy. She wants to be known first for attracting and retaining talented business technologists for Levi Strauss. Second, she wants to be remembered as a leader who helped business executives get the most out of IT.
"I would like to think I will have influenced [Levi Strauss executives] to appreciate how technology can help them work," she says. "I hope my influence is to say, 'Use technology; spend your investment wisely; understand your role in managing IT.'" Glick stops suddenly. "God, I'll have to work 'til I'm 75!" she laughs. "No," she adds quickly. "I'm more optimistic than that." Maintaining MomentumThe good news is that David Cooper loves his job. As an outsider to the insular, universitylike laboratory, Cooper has brought new business practices such as IT standardisation to the 47-year-old nuclear weapons development facility and built solid relationships with longtime lab employees who historically have been suspicious of outsiders.
The bad news is that a back injury could prompt Cooper to leave this job he loves. After a household accident in 1980, Cooper had three vertebrae surgically fused. He resumed a normal, active life-until last year, when he re-injured his back. Now he can hardly stand or sit for even short periods, never mind endure the long hours of air travel his job requires. Recent tests indicate that Cooper has ruptured three additional disks above the initial fusion. His options are to live with the pain or undergo additional spinal fusion. He's likely to opt for the knife, which would put him out of commission for weeks at best. And even then, there is no guarantee that he'll regain full mobility and return to work pain-free.
That's a shame because Cooper has made a difference at LLNL. When he first joined the lab in 1995, there was no central IT group, no IT standards. Six of the lab's 10 individual directorates had their own desktop support groups and the supported systems were endless. LLNL was spending roughly one-quarter of its $ US1 billion annual budget on IT, but there was no coordinated effort to maximise that investment.
David M. Cooper
Associate Director of Computation & CIO
Lawrence Livermore National Laboratory
Background: Hired away from NASA in 1995; in October 1996 Cooper was named the lab's first CIO. In his first year, Cooper moved to consolidate the lab's disparate systems and expenses and initiated the first set of software standards. He won popular support with successful efforts to increase IT staff's pay and loosen stringent Internet use restrictions.
Finalize and implement strategic information architecture planIdentify and implement new labwide hardware standardsConsolidate lab's desktop/LAN support servicesSecond-Year ResultsStrategic information architecture plan was completed and adoptedHardware standards have been setNew desktop/LAN support group is up and runningFuture ChallengeFind new ways to bring business best practices to the labToday Cooper oversees a new labwide desktop/network support group of 200 individuals who service all systems for all directorates. Purchases and licenses have been consolidated to the tune of $ US12 million to $ US14 million in annual savings, and Cooper's cross-functional Information Architecture Group has just drafted a new strategic plan that outlines network, desktop, security and management standards.
Cooper credits his quick progress to people's eagerness to run LLNL less like a college and more like a business, and he has learned from business executives along the way. He attends IT conferences and networks with a handful of Bay Area CIOs. "To be successful as CIO, I had to understand the customer and service provider perspectives. I had to learn how to interact with my customers-the other associate directors," he says. Once he established those relationships and identified and began filling his customers' needs, things moved faster.
Lab director C. Bruce Tarter says Cooper's greatest success has been his ability to balance business goals alongside the lab's government and academic influences, the confluence of which makes network security, Y2K and day-to-day operations at LLNL more complicated than in a corporate environment.
If Cooper can stay on, the opportunities for success will only increase. Right now, his group is wrapping up its Y2K remediation. On tap for next year are three key projects: -Total cost of ownership. Cooper must determine exactly what LLNL spends for desktop computing, networks and support and then conclude if anything should be outsourced.
-Strategic plan. Cooper must oversee implementation of the new desktop, network and security standards. -Database standards. LLNL has so many legacy databases, many of them holding key national security information, that there is no one standard system that can embrace them all. Cooper must determine which of these databases can be dismantled, converted to a standard system or preserved.
But can Cooper stay on? At 59, he'd hate to retire. But if surgery doesn't relieve Cooper's pain, then he's going to have to reconsider. "I'm not going to retire anytime soon unless I can't work. I love the job too much," he says.
"But if I'm like this in two years [when he's fully vested], I will have to leave." A New BeginningTwo years ago, Jonathan Fornaci prided himself on never staying at a job for more than two years. There was always greater money and a greater challenge elsewhere. Since then, the fast-moving 35-year-old hasn't stayed put for even one year.
The latest change came in November 1998, when Ibis Consulting Inc. - the firm Fornaci joined as CEO the previous March-was acquired by Proxicom Inc., a Reston, Va.-based consultancy. Eliminating his own job in the transaction (Proxicom already had a CEO), he soon found himself looking for work again.
In January, Fornaci signed on as COO at Luna Information Systems, a startup vendor of electronic commerce-enabling products in Oakland, Calif. Fornaci knows he's jumping into a sea of competitors selling fleets of e-commerce applications, but he thinks Luna's is the best at helping companies move their traditional sales processes to the Web.
Luna Information Systems
Background: Fornaci joined Genstar Container Corp., a GE Capital company, as CIO in early 1997. After Genstar merged with an industry rival, Sea Containers Ltd., in early 1998, Fornaci left to become CEO of San Francisco-based Ibis Consulting Inc.
Establish Ibis in consulting marketplaceManage startup company's rapid growthPosition Ibis to go public or be acquiredSecond-Year ResultsLed Ibis from $ US900,000 to $ US2.2 million monthly revenuesGrew company from 70 to 200 employeesOversaw $ US90 million stock acquisition of Ibis by Proxicom Inc.
Leverage his CIO and CEO experience in his new job as COO of a startup software vendorneeds more than a good product; it needs a champion to take charge internally and spread the word externally. That's the challenge Fornaci welcomes. "If this company is going to fail," he says, "then it's going to be because I didn't get the product or marketing message out there or because I didn't build the right team." Fornaci has no doubt that his CIO experience will pay off in this new job. "I understand the issues CIOs have out there, and I also care about business value and ROI," he says. He can speak the IT language. And he has been on the other side of the table from software vendors. He's heard their sales pitches and airy promises, and he's seen a lot of products that didn't fulfil their hype.
In his new role, Fornaci not only must deliver a product that works as advertised, but he also must put it in a context that is meaningful to CIOs.
Fornaci will be drawing upon his CEO experience, too, as he tries to get Luna off the ground. Immediately, he must move the company to larger, permanent headquarters in Oakland and prepare for the company's product launch, scheduled for the second quarter of this year.
At a stage in his life when he's looking for a little more balance between the personal and the professional, Fornaci also realises that Luna's launch requires long hours and high energy. The risk is that no matter how much effort Fornaci puts into the venture, the company could fail. Then he's back on the street looking for work. But if Luna gets off to a good start, Fornaci expects a promotion to company president. In that role, he could see himself sticking around far beyond his usual two-year timetable, and the long-term rewards could ensure financial security.
Anything is possible. "We could go IPO in a year; we could be acquired in two years." Fornaci says. "In the software business, you just never know." Last Words: Great expectations continue for Linda Glick, David Cooper and Jonathan Fornaci, but our series ends here. We thank them and their companies for the insights and access they've given us the past two years.
Senior Editor Tom Field can be reached at email@example.com.
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