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CIO Doug Schwinn and CMO Ed Kriete were hired within months of each other, but it wasn't until they had to share a car ride to an industry conference that they realized they could make no progress unless they found a way to work together in unprecedented ways. Writer Anne Field recently chatted with both men about what Schwinn has dubbed their "necessary alliance," a model for IT-business alignment at Hasbro.
CIO Insight: You couldn't have created Hasbro's new Web strategy without each other.
SCHWINN: Absolutely. This has been a collaborative effort that would not have succeeded without both of us working in tandem with each other.
KRIETE: Our predecessors were trying to do these things before without collaborating, but it just wasn't working.
Business and IT were in separate camps before you both arrived at the company in 1999?
SCHWINN: Everybody did their own thing, and the product that was delivered was high-cost and low-value.
KRIETE: And these weren't bad people. You have to remember the environment. When the Internet sprang up, there was the drive to just go out and do it. It was driven by the need for speed. You had to be there first to gain market advantage. We came in and said that the need for speed had been replaced with the need for greed. The only way that this is going to work is by working together and integrating the Internet into our overall marketing strategies and our sales strategies and our IT strategies.
SCHWINN: Also key was that we sat down and asked ourselves, "What is it that we as a toy manufacturer need to do on the Internet?" We actually sat down and looked at every component and said, "If I need this, what am I going to do to make funds available to develop that?" Without that interaction between the two of us, we couldn't have come up with a way to get things done.
KRIETE: Just as important, the relationship that Doug and I have forged has also served as a very strong model for our teams. Our business guys and our IT guys are in constant contact every day, so that our Web site producers, the guy who is in charge of the Internet and the people in our database marketing area work with their colleagues in IS very, very closely. That's been an outgrowth of this relationship.
So the two of you sat down one day and said, "Okay, let's overhaul the Web strategy."
KRIETE: Top management wanted more sophisticated stuff from the Web. At the same time, they wanted deep cost-cutting all the way around. The only way we could have that happen is if Doug and I worked together. We agreed that the Internet strategy needed an overhaul. We also knew there would be practically no new money kicking around to do it. But we kept talking.
SCHWINN: We figured out a way to have this pay for itself.
KRIETE: We started shutting down Web sites. We had to take down the old house and completely rebuild it. Now we're spending half as much for three or four times the impact.
How did you sell the idea to top management?
KRIETE: We pulled together a project team to look at our Internet strategy and evaluate ways to change it. We had to involve marketing, sales, IS and key business heads, so people could feel they had input. And we involved the middle managers, not just the top. There weren't just a bunch of chiefs on this committee; we also had the Indians who were going to be charged with implementation.
SCHWINN: The other key here is that this committee had an audience on a regular basis with the senior management team, so the strategy was developing right in front of their eyes. There never was a surprise. Ed and I would attend all their meetings, with everybody there, all the presidents of the divisions, and would talk for 10 to 15 minutes to give them all an Internet strategy update. Now this is being done regularly, but when we first started, those kinds of IT briefings were not happening at senior management meetings.
KRIETE: A lot of companies have been talking about Web strategy for five years. But you don't see a lot of them really doing it effectively. That's not just the toy business, that's across the board. I think one of the big reasons they can't is because their CIOs don't really work that closely with the marketing people, at least they haven't figured out a way to collaborate between IS and marketing. Our collaboration happened by chance, but the cost-cutting mandate forced us to push ahead in tandem with a plan that might not have otherwise gone forward. There was no other way it could be done.
Before, there was no cross-company CMO job and no national CIO, is that right?
SCHWINN: There were VPs of IS in each division and systems at every location. Now, the IT organizations throughout the world report to me, and that is a major change. We now look at investments in IT as investments across the entire corporation versus investments in specific divisions or specific countries.
KRIETE: My position was new when I got here. We have a brand group for each brand. There's a G.I. Joe group, there's a Playskool group, but my role crosses those groups and is involved with all of them. When I took the job, Hasbro didn't have any e-commerce capabilities.