How Kraft 'Primed the Pump' for Alignment - ' The Motivator '

Steve Finnerty grew up in Washington, D.C., in the 1950s, but he spent two weeks of every summer on his grandparents' farm in Princeton, Mo. "There was no running water," he recalls, "so I'd have to go out to the well and get the pump going by pouring some water into it to prime it."

Today, Finnerty, the CIO of Kraft Foods Inc.'s North American division, is still priming the pump, but this time it's all about using his leadership skills to inspire new ideas from his IT staff and business executives about how technology can beef up Kraft's bottom line.

Biz View: "In my experiences prior to Kraft, business folks would be in one corner, IT folks in another. There were business groups who couldn't spell IT and IT groups who were so enamored with technology that they forgot about the business." Daryl G. Brewster Executive Vice President Kraft Foods North America, Inc. and General Manager Nabicso Biscuit Division

Kraft doesn't do too badly pumping out profits: The Northfield, Ill.-based company is the second-largest packaged foods company in the world, with 2001 earnings of $1.9 billion on $34 billion in sales. Kraft controls hundreds of brands around the world—from Kool-Aid to Jell-O to Oscar Mayer hot dogs—and packages more than 500 different cheese products alone, including Philadelphia Cream Cheese. Kraft marketing executives say Kraft products can be found in 99.6 percent of U.S. households.

But given Kraft's size and complexity, making sure information technology is continually used to carry out the company's business strategies is becoming more critical to its ability to maintain its margins. Finnerty credits IT-business teamwork, for example, for Kraft's ability to move aggressively on the new-products front. Kraft spends more than $350 million annually on research and development, and last year, new products generated $1.1 billion in new revenues. "With work flow and collaboration technologies," Finnerty says, Kraft was able to bring Boca Rising Crust Pizza—a new frozen pizza with meat-flavored soy protein toppings—to store shelves in just 12 months, well under the industry average of 18 to 24 months.

IT View: "If you're constantly trying to focus on where the other person is coming from, instead of concentrating on your point of view, you're going to effectively communicate. If you're truly communicating, you're going to be in alignement." Stephen C. Finnerty Senior Vice President and CIO Kraft Foods North America, Inc.

How does Finnerty manage to keep such IT-business teamwork on the front burner? Part of it is exposing his staff continuously to new technology ideas from outside Kraft—and outside the confines of the IT department.

At regular retreats, for example, Finnerty invites senior business executives, such as Daryl Brewster, chief of Kraft's Nabisco Biscuit Division, to schmooze with senior IT staff. At the meetings, top business executives talk about what they want to achieve and what's holding them back. The IT managers then spend the next two days coming up with solutions. In Brewster's case, the session led to ideas for how IT could help his unit get market data faster so that it could make smarter strategy decisions. Now Brewster's direct-store sales force uses handheld computers to improve how efficiently they order products, execute merchandising and communicate with each other. His research and development teams are sharing ideas globally, day and night.

The meetings also give IT managers the chance to brief each other on their visits to other companies in other industries, another source of new ideas. Says Madeline Weiss, president of Bethesda, Md.-based Weiss Associates Inc., who helps Finnerty run the retreats: "Steve's whole approach is how to increase profits, not just cost-savings."

Photos by Marc Asnin (Brewster) and Jan R. Bohm (Finnerty)