Hail To The E-Chief

Dec. 21, 2004
IT executives are versatile innovators, managers, and counselors. If they do their jobs well,

Jeffrey L. Peterson joined Du Pont & Co. in February 2000 to become its first vice president of e-business. His assignment carried a dauntingly broad mandate: Bring e-business into Du Pont. Since those first few months, when Peterson described his job as 90% cheerleading, his day-to-day experience at Du Pont has grown increasingly intense and diverse. Instead of simply evangelizing new-economy concepts, he's guiding, explaining, planning, managing, and executing a host of e-business initiatives. He oversees a virtual organization of 300 people, and his efforts now involve a multitude of the company's 80 business units. He's applying a background in systems engineering, an understanding of Web-like thinking, and an abundance of energy and patience to help each group internalize e-business thinking. "My job is to put myself out of a job," he says. Peterson is one of many e-business leaders in industry whose roles are maturing, along with the technology that created them. The first wave of e-chiefs often served as entrepreneurial figureheads, or technology gurus who advised their CEOs. Today's decision makers, by contrast, have moved beyond the era of carte-blanche experimentation on the Internet to foster a more controlled kind of creativity. In fact, the new e-commerce chief is equal parts innovator, manager, and counselor. These executives run not only Web sites but also entire organizations. They transfer new-economy thinking across many different internal units and divisions, and they help individuals adjust to change along the way. But the real proof that senior management has begun to treat them like any other general manager or vice president is that they now are held accountable for producing measurable, lasting results. The Innovator As the Internet infiltrates the business-to-business processes of manufacturing corporations, e-commerce chiefs assume duties throughout corporate operations. Some, like Randy Darcy, senior vice president, supply chain, General Mills Inc., and Corey Billington, vice president, supply-chain services, Hewlett-Packard Co., run supply-chain operations and services. Others, including Douglas L. Maine, who is general manager of ibm.com, focus on enhancing the customer experience. Another type is in charge of a separate organization that seeks to infuse many different parts of a company with e-business thinking. Du Pont's Peterson and Gary Dilts, the North American senior vice president of e-business for DaimlerChrysler AG, are two examples. Senior management has intentionally positioned these e-business executives well outside the traditional sphere of the information-technology team. They have been asked to focus not on technology but on business strategy. One word finds its way into all of their job descriptions: innovation. In an environment with few precedents and practically no rules, the job requires a healthy dose of curiosity and creativity. Darcy, who has a background in engineering, manufacturing, and research, describes his team at General Mills this way: "We're inquisitive enough to ask questions when others would just walk right by. And we're creative enough to do something about it." He spends countless hours with developers "to try to understand the probability that their technology will turn into something meaningful." One recent example brings Darcy's outlook to light: In the course of evaluating some 150 companies for partnering opportunities, Darcy came across a Minneapolis-based start-up called Nistevo Corp. The start-up had developed the beginnings of a shipping system that looked promising for a cereal manufacturer. "They had a good idea and an understanding that they needed the input of real bricks-and-mortar businesses to make it work," Darcy recalls. "We helped them shape their product." Now, Nistevo's system allows Darcy to follow a truck from General Mills' Covington, Ga., plant to a receiver in Chicago. The software has automated the processes of ordering and tracking the truck. More importantly, through an online exchange, General Mills can see and allocate surplus shipping capacity for the first time. Historically in the trucking industry, 12% to 15% of the time trucks run empty between loads, so the potential to achieve greater productivity through the exchange is significant. E-business decision makers routinely experiment with a variety of techniques for bringing out this kind of ingenuity in their staffs. Darcy has tried everything from creative exercises with comedy troupes to Hollywood-style character role playing. Likewise, at DaimlerChrysler, Dilts promotes "progressive tension" between his technology and finance teams. "They have tremendous fights and debates," he says. "But the finance team accepts that everything doesn't have to be a 24-month ROI. They are more innovative in some ways than the technology people." The General Manager In May 1999 DaimlerChrysler CEO Jrgen Schrempp invited a group of company executives to a series of meetings in which they debated how to approach the e-business opportunity. Dilts, a self-described "organizing person" with a background in sales and marketing, was one of the participants in that formative group. In previous roles, Dilts had interfaced extensively with technology experts, and he eventually was named to lead the e-business effort in North America. Today, Dilts runs an organization of 50 high-level people and is one of a few e-business leaders to enjoy the company of a counterpart in Europe, Harald Schuff. "It's nice to have somebody who's not a competitor staying up nights worrying about the same things I am," Dilts confesses. Together, Dilts and Schuff report to the company's board on a monthly basis. A year ago, IBM decided to merge its call center and Web operations to form ibm.com, which is primarily a sales organization. Maine, the former CFO of IBM, believes he was asked to run the new group because he was familiar with call-center technology and operations from his prior service at MCI. For ibm.com, Maine is in charge of developing Web sites, marketing, finance, and customer service. "I have to be involved in all of these areas," he says. And he has to show results. With a staff of 7,000 employees -- 4,500 of whom are quota-bearing salespeople -- ibm.com accounted for 10.5% of IBM's total revenues in 2000. "We're not just inventing things from left field," Maine contends. Increasingly, executives such as Maine are setting up and running substantial organizations to carry out their visions. Two factors are key to their success in this area. The first is a systems-engineering mind-set. HP's Billington, whose track record for innovation in supply-chain management predates the commercial Internet, knew that it was not enough to bring in technology that enables HP to be more efficient in its supply-chain service activities. "We also have to create systems that allow us to take advantage of the technology," he says. He and Du Pont's Peterson agree that an e-commerce chief who understands the big-picture relationships and context of every product, business unit, and Internet initiative within a company will emerge far ahead of one who gets bogged down in the technology. Second, although meeting with dot.coms and Internet pundits is admittedly important, those who do the job say that knowing the inside organization matters as much, if not more. "This person must be able to assess not only opportunities, but also risks to the company," explains John Fontanella, senior analyst at AMR Research Inc. "You need a trusted advocate within the company to market and sell ideas." For his part, Peterson learned this reality the hard way. As the former vice president of e-commerce for General Electric Co., he did not enter the e-business role as a Du Pont insider. "One of the sobering realizations for me was that this company has 190 years of successful culture," he recalls. "The average tenure of people here is something like 20 years and people thought, 'Here comes this kid with 20 hours of tenure who's telling us we need to change?'" In response to the skepticism, Peterson conducted a series of personal interviews to get a sense of the pulse of the place. Afterward, he was able to conclude fairly quickly that "e-business at Du Pont had to be systematically injected into every division. It could not be a separate initiative. In such a nascent field it's easy to assume that most e-business executives learn these e-management skills as they go, in a consultant-like model. But, Peterson argues, that approach gets many e-commerce chiefs in trouble. "Few people can truly comprehend large-scale systems thinking," he suggests. "You need that background to build credibility within the business units. The Counselor Perhaps the most unexpected skill that successful e-commerce chiefs bring to the table is the patience for counseling individuals through e-business upheavals. These managers have learned that no matter how exciting their Internet-enabled ideas may be, people fundamentally have a limited bandwidth for change. "We can typically think through change much more quickly than we can manage the tension of the organization," HP's Billington explains. "You want people to change but not so much that they can't cope. It's like a pressure cooker. You have to determine the right level of heat." If the job of e-commerce chief has become more formalized around the roles of innovator, manager, and counselor, it certainly hasn't gotten any easier. On a typical day, for example, Dilts says he crams in an interview with an Internet industry expert, meets with a technology vendor, holds four or five briefings with project heads, and communicates with top management. To be sure, e-business executives must perform a classic balancing act. On the one hand, they must be able to work in a messy environment where creativity, flexibility, and speed are essential. But they also must bring more than a few pounds of pragmatism to the mix if they are to succeed. Scott Myers, general manager of e-business for specialty-steel manufacturer Carpenter Technology Corp., calls it managing on the edge of chaos. He warns would-be compatriots, "If you're a linear thinker, you'll have a tough time with this role." Clearly, the new generation of e-business decision makers brings to the table a unique combination of skills and experiences: an intimate understanding of the forces driving the new economy, a formal business-management background, and an ability to listen and to coach others through times of dramatic change. The downside is that as their roles become more established and e-business becomes just business, their jobs may become less visible and more ordinary. Peterson's stated mantra is that the "e" ceases to be. If he succeeds, it will be back to business as usual for the new e-commerce chiefs.

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