How Kraft 'Primed the Pump' for Alignment - ' Eyes Wide Open '

Eyes Wide Open

Finnerty himself is an inveterate networker. As president of the 2,500-member Society for Information Management and as a member of the Research Board, whose membership is composed of CIOs at the top 100 companies worldwide, Finnerty practices what he preaches. About a third of his time outside Kraft is spent "looking at what's going on in other industries and what can transform ours," he says. A visit to Cisco Systems Inc.'s headquarters two years ago, for example, generated ideas for e-procurement and a customer self-service extranet. The latter lets grocery chains and other big retail outlets get instant information from Kraft on order status, promotion updates, consumer research and other information; in the past, they had to track down a salesperson or wait for a Kraft presentation. "The discussion between our salesperson and the customer can be more than transactional," Finnerty says. "It can be more consultative: 'How can I help you improve your business?'"

E-procurement is another example. "We're in a tight-margin business, and you have to make sure your supply chain is incredibly cost effective," Finnerty says. An IT e-procurement initiative dreamed up by Finnerty's people in partnership with the business side is still being rolled out. But it is already taking costs out of the supply chain.

But the retreats, road trips and internal brainstorming sessions aren't the only alignment techniques in Finnerty's bag of tricks. In 1999, he helped develop a two-day technology boot camp for Kraft's top 30 executives at Northwestern University's Kellogg School of Management in Evanston, Ill., in suburban Chicago. The goal was to raise the level of awareness about information technology and how it could change the way Kraft does business. "Kraft was the first company to do this," says Anthony Paoni, a Kellogg professor of technology and e-commerce, who helped lead the session. Paoni had pitched his idea for such seminars to "at least 25 other big companies, but they just weren't ready for it," says Paoni, who is also vice chairman of DiamondCluster International, Inc., a Chicago-based management consultancy.

The impact of the first boot camp was significant, Paoni says, chiefly because Finnerty knew how to talk about technology to a room full of business people—no easy task, still, for many CIOs. "Steve revolutionized how senior management at Kraft looks at IT," Paoni says. Using business language, not IT language, Paoni says, Finnerty made IT less intimidating, and "caused a critical mind-set change. Instead of thinking about strategy, the management team began thinking about strategy and the role and value of information and business systems."

Paula Sneed, president of Kraft North America's e-commerce and marketing services, says the boot camp helped convince Kraft senior business leaders that "technology isn't the understudy, it's part of center stage and keeps us aligned." Finnerty, for his part, sees to it that such thinking remains front and center. Today, for example, when Kraft's management team is considering new products or developing new strategies to go after a new market segment, "the team's first question is 'What information do we need and what business system will we get it from?'" Paoni says. "This is a big change."

Sure enough, the Kraft executives who left that first boot camp came up with eight to 10 new projects linking business IT systems to strategy—initiatives they planned to implement right away, not in a couple of years. Example: a new e-commerce division, a key part of the company's efforts to win "share of stomach" for its new products. Today, Kraft Foods' Web site, where consumers get all manner of advice on recipes and meals, attracts 12 million visitors a month.