For IT executives seeking innovative ideas and proven techniques that will help them provide great service to their “customers”, both internal and external, there was no better place to be this June than in Niagara-on-the-Lake, Ontario, site of the second annual CIO Assembly, the country’s leading IT executive retreat and think tank, produced by CIO Canada in cooperation with the CIO Executive Council.
The theme of the event, Outside In: Value Through the Eyes of External Stakeholders – Customers and Business Partners, resonated throughout the three-day event, beginning with the opening night keynote by Andy Brandt, former CEO of the Liquor Control Board of Ontario and concluding with the closing plenary on Creating Customer Excellence, presented by Helen Polatajko, CIO of CIBC Mellon.
Brandt set the stage nicely, recounting how the LCBO transformed itself from antediluvian alcohol peddler to highly successful lifestyle-oriented liquor merchant by getting in tune with both internal staff and customers.
Finding that staff were intimidated by shoppers’ questions, he put them through extensive product knowledge courses, marking a turnaround in the way the LCBO related to customers. Borrowing from Wal-Mart founder Sam Walton, Brandt got some of his best ideas by going out to stores all across the province and talking to staff at the lowest levels. “If you call people by name,” he said, “it will gain you yardage like you wouldn’t believe.”
He also sent 20 to 30 handwritten and signed notes a week to employees. “There’s no way to build a stronger commitment from staff than to build that kind of relationship,” he said.
Brandt noted the LCBO has often been criticized for its Air Miles program, but he said it has worked out “phenomenally well” because of the customer database it has provided. “You can’t cookie-cutter 600 stores,” he said. “Air Miles was fundamental in helping us design stores in different regions.”
LESSONS FROM HOME DEPOT
Kicking off day two, Home Depot Canada’s SVP Operations, Harry Taylor (cover photo), gave participants an inside look at the company’s key customer service initiatives.
“We have to win the war for customers if we are going to grow our business,” said Taylor. “Measuring ourselves against our competitors isn’t always the best thing to do,” he added. “We have to measure ourselves against customer expectations.”
To ensure that it lives up to these expectations, Home Depot is focussed on attaining excellence in three areas: customer service, merchandising and operations, he said.
Customer service excellence starts with having knowledgeable, engaged associates. “It’s always about the people,” said Taylor. Other key factors are informative signage, efficient checkout, and the availability of workshops and seminars for patrons.
When it comes to merchandising excellence, Taylor said, “we need to carry not only basic products but also the new innovative products. Home Depot sells “the complete project”, and needs to have considerable depth and breadth in its product assortment, he noted.
On the operational side, stores must be clean, bright, and easy to navigate, and there must be minimal “out of stocks”. The company is using wireless mobile ordering carts to scan in product data and expedite restocking, Taylor said.
Perhaps the most critical operational element is the alignment of labour with customer service requirements. “Hourly payroll is over two thirds of our pre-tax operating profit, so we can’t just hire more associates,” said Taylor. An IT-based labour-scheduling system is helping the company optimize its HR resources, so that the right number of associates are on the floor to meet customer needs. The company has also made a considerable investment in Web-based training to ensure consistency in the delivery of content to its associates and to free up more time for trainers to spend with customers.
Among Home Depot’s current initiatives are the availability of a “one-minute button” in various departments, ensuring that a staff member assists the customer within that time frame, and the introduction of self-check-out counters, which reduce wait times.
MAINTAINING YOUR FOOTING
Steven John, CIO of adhesive and sealer manufacturer H. B. Fuller, followed Taylor with a presentation entitled “Remembering Forward: Creating Collaboration with our Customers”.
John’s focus was around how organizations work with their customers to form teams that share information, power and decision-making in order to create value and discover new knowledge together.
“One of the key things in IT that we tend to forget is that our success is based 80 percent on relationships and 20 percent on expertise,” said John.
He cited three critical IT success factors: focussing on the basics – operational, transformational and conceptual work, in that order; strengthening relationships with all stakeholders; and managing wholes versus parts.
“You have to know what technology you have, what technology is coming and what that technology could make possible. But don’t be distracted or driven by it,” he warned.
John said that at some point, teams are subject to a danger that sometimes afflicts mountain climbers and is known by the initials LFCSAFTD. This, he explained, stands for Lost Footing, Couldn’t Self Arrest, Fell To Death.
If you want to reach the summit when working collaboratively, John said, “you need to build in, from the beginning, tools that will help you self arrest and regain your footing. These ‘tools’ include a supportive business environment (including proper executive chartering, full time leaders, performance appraisal and appropriate corporate policies) and leadership in supporting knowledge exchange. The latter includes picking the right people, establishing norms to work together, managing virtual interactions, and recognizing and leveraging differences.
Following the Assembly’s first panel session, chaired by Dr. Peter Carr, Director, University of Waterloo (for panel sessions, see sidebar), there was a change of pace for participants, as they engaged in a brainstorming and working session dealing with key aspects of building customer excellence. Delegates at each table discussed one of four topics and presented highlights to the group as a whole.
Day two ended with the second panel discussion, “Bringing it all Together: Creative Thinking, Proactive CIOs and Knock-out Technologies”.
TOYOTA’S CUSTOMERONE PROJECT
The final day kicked off with a presentation by Hao Tien, Director and CIO of Toyota Canada, entitled “The Relentless Pursuit of the Exceptional Ownership Experience”.
Toyota’s approach to customer loyalty starts with the twin pillars of “perfect” products and “perfect” services, leading to the “perfect” ownership experience, which results in customer satisfaction and, ultimately, lifelong brand loyalty. The approach is the basis of the firm’s CustomerOne Vision.
“We monitor every customer touch point throughout the ownership cycle,” said Tien. These include a variety of touch points involving Toyota Canada Inc, Toyota Financial Services, and the dealer network. “By doing continuous improvement on those areas, we can improve the customer experience.” Recognizing that one bad customer experience can undermine all these efforts, the company has added a third pillar to support its loyalty strategy: problem resolution.
Tien believes that CIOs, more than any other functional executive, must understand what customer satisfaction and loyalty is all about. “We are the key to bringing innovation that enables the company to compete,” he said.
Tien offered some key lessons learned in implementing CustomerOne:
• CRM requires changing culture and long-term commitment from management; management commitment alone is not sufficient – you need to get the front-line people on board.
• Data and data sharing with partners are the key enablers
• Be patient with your ‘Customer’ project ROI. It will come… eventually.
RAISING THE PERFORMANCE BAR AT PROCTOR & GAMBLE
Keynote speaker for the final day was Robert Scott, VP, Innovation & Architecture for the Global Business Services (GBS) arm of Proctor & Gamble. He presented a P&G case study entitled “Raising the Bar: The Expanded Role of IT and the CIO”.
Scott was blunt in his assessment of the customer. “We believe we have only one boss – the consumer. He or she can fire us any day.”
He said there are two moments of truth for P&G’s customers. The first is when they walk into the store and decide to buy the company’s product, the competitor’s product, or no product at all. The second is when they take the product home and use it. “Their reaction is that this is either the most wonderful product they’ve used in their life, or ‘this sucks’ – or anything in between,” he said. “At Procter & Gamble, we believe we have to win both moments of truth to be successful.”
P&G has outsourced its “commodity” IT work so that the company could “move up the food chain”, said Scott. In fact, he added, the company’s CEO, A.G. Lafley, has gone on record as saying the company will get 50 percent of its innovation from outside the walls of the company.
Not unlike Toyota, GBS has a “Total Service” vision, incorporating the following: continuous improvement in efficiency and cost; superior quality and operational excellence; intense focus on building business value; constant attention to innovation; and synergy and flexibility. The bottom line: “Run GBS as a business”.
Scott outlined the key drivers behind GBS’s business model. Ideas, born of creative innovation, drive big ideas (business innovation), which result in “products” that scale; these drive a strong commercialization effort, resulting in compelling value creation.
The P&G executive believes that the role of the CIO must go beyond traditional IT to general business unit leadership. He sees the CIO taking on the mantle of Chief Innovation Officer, leading transformation of the IT organization.
“One of the most critical roles of the CIO is to change the thinking of IT in the organization from current reality/problem solving to: Here’s my current reality; here’s what needs to be. What do we need to do to get there?” he said.
FUTURE STATE OF THE CIO
In a presentation called “Thinking Globally, Acting Locally”, Kalev Ruberg, CIO of Tek Cominco, gave the audience a glimpse inside the IT organization of a mid-scale mining firm. Such organizations are the polar opposites of P&G when it comes to IT operations.
“We are on the low end of the information services maturity scale,” said Ruberg. “Traditionally, the mining industry has the lowest IT spend.” And 100 percent of that spend is on keeping things running. The goal, he said, is to get to the point where the spend is divided 50/50 between innovation and utility.
Concluding the morning session, Mark Hall, General Manager of the CIO Executive Council, outlined some of the important initiatives of the Council, including work on “The Future State of the CIO” project (See “What’s your executive potential“, CIO Canada, July, 2007), which is intended to enable CIOs to measure themselves on the journey to becoming business strategists that can help the organization compete.
Hall gave examples of leading American IT executives who understand that the CIO must contribute to growing the business. He added that CIOs need to change their business conversation from “What can we do for you today?” to a dialogue related to understanding the business.
A working lunch followed this session, with John Pickett, IT World Canada VP & Editorial Director, providing results and analysis of CIO Canada’s 2007 IT Salary Survey.
During the closing plenary, CIO Executive Council member Helen Polatajko of CIBC Mellon did her usual adroit job of recapping the most interesting themes and ideas that were put forward during the event. After tying together the many areas of discussion, she made a strong case for value of the CIO Executive Council, urging attendees to join the organization and start reaping its many benefits. 077972
David Carey is a veteran journalist specializing in information technology and IT management. Based in Toronto, he is editor of CIO Canada.
Greg Enright is a veteran IT journalist and member of the IT World Canada editorial team. He is the former editor of ComputerWorld Canada.
SIDE BAR: BRINGING A FRESH PERSPECTIVE
Day two highlights included two panel sessions, each with three prominent Canadian IT execs discussing issues around sparking fresh thinking in the IT organization.
First up was a panel session entitled “Getting the Juices Flowing: Fostering Entrepreneurial (and Intrapreneurial) Thinking in the Organization”. Panelists were Dr. Catherine Boivie, CIO, Blue Cross, Phil Cutter, CIO, Danier Leather, and Linda Siksna, VP, IT Shared Services, Canadian Tire.
Siksna said she views the CIO’s role as one of interpreter to other executives. Successful communication at this level involves “putting IT in context to the business. If you get up there and talk in terms of bits and bytes and platforms, business doesn’t care. Business wants to know if you are going to move (the) business forward… I consider myself to be bilingual and I think that’s the key.”
Boivie agreed, adding that translating complex technology concepts into recognizable examples has worked for her. When it came time to explain the Services Oriented Architecture (SOA) idea to her non-techie peers, she summoned the image of a long-popular childhood toy to get her message across.
“I said, ‘Remember when you used Lego blocks? You could still add pieces to it without throwing the old stuff away because it all had the same interface.’” A CIO will be better off in such situations, Boivie said, “as long as you can relate it to something they know about.”
Cutter said that a broad business knowledge can help CIOs get “an equal voice at the table,” but wondered why more of them aren’t yet sitting there.
“CIOs are pretty damn smart and I’m not sure that enough companies are taking advantage of that,” he said.
The second panel session, which capped off the day’s formal agenda, revolved around “Bringing it All Together: Creative Thinking, Proactive CIOs, and Knock-out Technologies”. Panelists were Eldon Amoroso, CIO, London, Ontario Police, Andrew Dillane, CIO, CNC Global, and Hao Tien, CIO, Toyota Canada.
Identifying just who their customer is can be a moving target for CIOs. For Amoroso, the definition has changed over the last seven years. “Seven or eight years ago, we viewed the customer as the [police] officers,” he said. “They were the investigators, they were handling the homicides, so surely they were our customer.”
Since then, however, the focus has shifted to the city’s citizenry, Amoroso said.
“In the past seven or eight years we have changed our approach to that because as an organization we have really tried to [improve] the perception of the police in the community. Public safety is for the people in the community – they have to feel safe. So it became a real important issue for us.… Our view of the customer is much broader.”
The shift has borne fruit in the form of, among other things, an improved background check process. After hearing a complaint about the ten-week wait times to have a check done, Amoroso set about speeding up the process. Today, thanks to initiatives worked out by staff members responsible for them, turnaround is down to one to seven business days.
Toyota’s Tien views the executive committee as being part of the customer picture. “By taking care of their wants and needs, I’ll be able to help them help me.”
A large portion of that process, he added, involves the IT department “looking from the enterprise perspective and saying, ‘What do we do as an IT department that can impact the product and the services that we provide to the end customer?’”