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6/15/2009
04:58 PM
Bob Evans
Bob Evans
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Global CIO: Six Lessons CIOs Must Learn From Coke's Dazzling Innovation

CIOs from all industries need to sit down with their C-level peers and imagine fresh new approaches and processes that give customers more choices while driving more actionable, customer-based knowledge back to headquarters.

3. Via Freestyle, Coca-Cola's IT team is now directly and deeply engaged with the consumers who drive decisions on what products fly and what products fail. It's comfortable and easy to reinforce the old bromide that IT's one and only job is to support/align with the business, but that type of thinking is probably one of the key factors that kept Coke's IT team its R&D engineering team from working together closely for decades. And I will submit to you that a CIO and an IT team that let themselves stay detached from direct connections with customers are going to become increasingly irrelevant. By sticking with the passive outlook of 'I'm here to support the business, not BE the business,' those backward-looking CIOs and their IT teams will inevitably come to be regarded as part of the problem that's blocking innovation, that's stifling breakthrough thinking, that's letting entrenched processes and thinking overwhelm new ideas and consumer-driven innovation.

LESSON 3: Put together a list of all the ways you and your IT team directly touch the people who pay your company money. Sit back and take a look -- are you proud of that list? In your next compensation meeting with the CEO, would you produce it as Exhibit A, or would you hope the conversation doesn't come up? Are you and your team aligned with where your business has been, or are you connecting forcefully with where your business is headed via your customers?

4. Renowned management consultant C.K. Prahalad talks about three steps in the development of seller-buyer relationships: In the first, companies make stuff and sell it and hope customers buy it; in the second phase, they listen to feedback from customers and go back and retool and reintroduce and hope customers are still interested; and in the third and most-enlightened stage, companies innovate and lead, moving in lockstep with their customers because they have brought their customers into the intimate relationship of co-creating products and experiences along with the seller. Coca-Cola has achieved that with Freestyle: Instead of saying, "Take your pick of the very same stuff we have sold across the world for the past 15 years: Coke, Diet Coke, Sprite, Diet Sprite, Orange, etc.," the company can now offer a totally new and unprecedented value proposition to its consumers: "Hey, c'mon in and take your pick from 100 different options of soda, team sports drinks, flavors, sizes and more -- after all, you're the one paying for it, and you should be able to pick exactly what you want."

LESSON 4: Within reason, how good is your company at not just allowing but indeed encouraging customers to enter the product-development lab with you and co-create products as well as experiences around those products? In thinking this through, it could be perfectly understandable if your first reaction is to say something like, "No way! If we let customers in the kitchen, there's no telling what crazy ideas they'll come up with -- it'll throw all of our planning and processes into complete chaos! That's nuts -- our systems just aren't set up to handle that level of unpredictability!" Yes, it's an understandable reaction, but is it the right reaction? Is it forward-looking and growth-oriented, or does it reflect an outdated emphasis on traditional ways of doing things as opposed to moving at the speed of your customers? (And if you say, "That stuff's not the CIO's job," well, good luck with that outlook.)

5. Hayes Weier's news-analysis story about Coke's Freestyle breakthrough goes into considerable detail about the rich and diverse software stew the company needed to put together to turn the vision into reality. Ingredients include Windows CE, wireless networks, Microsoft System Center Configuration Manager for Mobile Devices, Verizon VPN, Verizon wireless cards, SAP point-of-sale management software, Tibco middleware, SAP Business Warehouse, SAP CRM system/portal, and RFID readers and sensors.

LESSON 5: Could you and your team put all those pieces together? Or do you look at this and believe your company wouldn't support it, or you don't have the budget, or somebody's too worried about security issues with wireless, or what other types of rationale and excuses? How, then, do you need to reframe your arguments to overcome those objections? If you can't get the budget on your own, could you do so in close collaboration with the other teams that would be heavily involved? Are all these objections really just manifestations of siloed operations and processes? How do you want to be known: as an outward-looking, deeply collaborative and revenue-focused CIO, or as the former CIO who always worked hard but just stayed too focused on the technology without proposing ways it can help us transform to what we need to become?

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