November 27, 2000

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Chiefs Of The Year:
Opposites Attract

Ralph Szygenda, Rick Wagoner
General Motors

By Marianne Kolbasuk McGee

he basics of the automotive industry haven't changed much since the days of Henry Ford. Now, General Motors CIO Ralph Szygenda and president and CEO Rick Wagoner are allocating a lot of horsepower to driving GM into the Internet Age.

"The GM world calls him 'E-Wagoner,'" says Szygenda of his boss, a 23-year company veteran who was named GM president and CEO last June. "We have a close working relationship. Rick is very active in the electronic change of the company." Together, Szygenda and Wagoner, along with a slew of IT and business talent, are transforming the automaker's IT infrastructure and positioning the company for E-business.

It's been no small feat. The odds for dramatic change at GM seemed slim when Szygenda came on board in 1996. The $176 billion company had thousands of legacy systems that couldn't share information. And most of the company's executives didn't use PCs even for E-mail.

In the bigger picture, GM was the largest automaker in an industry that has manufactured, via assembly lines, and sold, via dealers, vehicles the same way for nearly 100 years, says Gartner automotive E-business analyst Thilo Koslowski. But as automakers face shrinking market share and profits, their challenge is to sell services as well as cars. They're racing to become E-businesses, Koslowski says.

Since coming to GM, Szygenda has been shaking up IT. He has overhauled the company's IT organization and infrastructure, attracted many talented technology managers, and set a foundation that's beginning to reap E-business benefits. The company has reduced IT costs by nearly a billion dollars since 1996. And its standardization of system platforms, including SAP R/3 for enterprise resource planning, is considered key to a plan to offer consumers build-to-order vehicle services via the Web within the next few years.

"Ralph brings a different perspective to the business," says Wagoner. "He's willing to mix things up. He's brought a sense of urgency to the culture, and that's added a lot of value." In 1998, Wagoner asked Szygenda if he thought GM was moving fast enough with its E-business efforts. "I told him 'no,'" Szygenda says. "He told me to fix it." That resulted in the 1999 launch of eGM, a business unit to kick-start business-to-consumer efforts throughout the company.

"GM's units are traditionally autonomous," says Szygenda. "If not for Rick Wagoner, [eGM] might have never happened. From the time Rick took over as president, he jumped on the whole E-business movement of the company. He gives us total empowerment."

Szygenda and Wagoner mesh well as a team, but they come from different worlds. Wagoner is a veteran of the slow-to-change auto industry. Prior to being named CEO--a position for which he was being groomed for the last few years--Wagoner was GM's president and chief operating officer; prior to that he was president of the automaker's North American operations. In contrast, Szygenda's roots are in fast-moving high tech. Before joining GM, Szygenda was CIO at Bell Atlantic. Prior to that, he spent 21 years at Texas Instruments, where he was CIO and VP and general manager of the systems integration business.

"Rick comes from the traditional automotive side, where decisions are often consensus-driven. When I make decisions, I take the hill," says Szygenda. "I'm known as a task-master. But Rick has become more top-down in his management style since becoming CEO. He picked up E-business and ran with it." Despite the different backgrounds, both speak their minds. "Ralph says what he thinks, and I like to call a spade a spade," says Wagoner.

Those who work for the executives know these qualities well. "Ralph is impatient, and he expects results. He's very energetic, very driven," says Tony Scott, GM's chief technology officer. Szygenda recruited Scott almost two years ago from Bristol-Myers Squibb Co., where he was VP of IS. "Someone with the same background and experience but with a milder personality might not have been able to have the impact that Szygenda has had at GM," Scott says. "You need a strong personality to whack the permafrost at a corporation like GM."

Those characteristics have led Wagoner to depend on Szygenda for more than technology. In fact, Szygenda is a change-agent within the company. "Our discussions are more strategic in nature. Ralph plays a far greater role than information technologist," Wagoner says.

Wagoner is true to his words: Szygenda sits on the automotive strategy board, GM's top executive committee. The two talk weekly, sometimes daily, depending on the projects under way. Both executives were involved in GM's deal with America Online Inc. to provide all GM employees with Internet access from home. Wagoner has also been involved with E-business initiatives, including GM's participation in Covisint, the auto industry's E-marketplace.

Wagoner sometimes sits in on meetings between Szygenda and top executives of technology companies. That includes recent get-togethers with Hewlett-Packard's president and CEO Carly Fiorina and Scott McNealy, chairman and CEO of Sun Microsystems, to discuss technology developments and trends. Wagoner absorbs and understands technology "extremely quickly," says GM's CIO.

The two executives have learned from each other.

"I'm much deeper in my understanding of the automotive business," Szygenda says. "I'll be asked to give a presentation to 150 analysts, not as CIO or technologist, but as a representative of the company." At the same time, Szygenda says he'd never be embarrassed to have Wagoner give an E-business presentation. "That wouldn't have been the case four years ago," he says. How times have changed--for the better, as far as E-business is concerned.

Return to the "Chiefs Of The Year" introduction page.

Photo of Szygenda by Dwight Cendrowski
Photo of Wagoner by Joe Polimeni

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