Chief Of The Year: Ralph Szygenda - InformationWeek

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11/27/2002
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Chief Of The Year: Ralph Szygenda

General Motors' hard-driving CIO has revved the engines of the carmaker's once-stagnant IT systems

Ralph Szygenda is less than pleased with his 20-handicap golf game And with the trout that too often outsmart him when he's fly-fishing in Montana. But finding the time to improve either hasn't been easy for someone who's spent the past six years heading the IT transformation of General Motors Corp., a project that many brushed off as impossible before Szygenda even stepped foot in GM's Detroit headquarters.

Back when he joined GM, the carmaker was the largest company in the world, but market share was declining, its cars lacked personality, and its IT efforts, run by its subsidiary EDS in an outsourcing arrangement, were stagnant. "Executive leadership of IT was nonexistent at a time when the world's largest company was in transition," says Szygenda, 54, from his 34th-floor office overlooking Detroit.

Now the company is gaining market share for the first time since the '80s and posting a profit, and it ranks third behind Toyota and Honda in J.D. Power & Associates' quality rating, the highest ever for a U.S. automaker. Szygenda and a hand-picked team of veteran executives--he interviewed 300 people for the top 30 business-technology positions--have built a technical infrastructure during the past six years that played a central role in CEO G. Richard Wagoner Jr.'s effort to turn a 355,000-employee glacier into a real-time organization capable of market-leading innovation. "From his first day here, Ralph has challenged conventional thinking," Wagoner says. "He and his team deserve a lot of credit for enablng GM to move much faster." And they did it by spending $800 million less on IT now than GM did six years ago. "We've taken all of IT and rebuilt the entire network of this company," Szygenda says. "We want to be the best automotive company in the world and to be a real-time company. How? By taking time out of everything we do" (see "Time Trials," June 3, p. 36).

Business technology is central to that real-time vision--and to the progress GM has made. GM used to take 48 months to develop a new car. By changing its design processes using more collaborative infrastructure and 3-D virtual-reality modeling software, that has dropped to less than 18 months. CAD/CAM files used to take 45 minutes to upload; now they take two minutes, thanks in part to a new high-speed network. Improved automation has reduced the time it takes to deliver customer-and dealer-ordered vehicles from about 70 days to 30. GM Smart Auction, an online auction site that 4,000 GM dealers use to bid on used cars, eliminates the time and expense associated with physically driving a car to an auction site, saving General Motors Acceptance Corp., GM's financing arm, $400 to $600 per car. With the volume of cars sold through GM Smart Auction expected to double this year, that translates into $120 million to $180 million in savings.

Szygenda didn't get this job done by being an easy boss to work for. He holds outrageously long Friday meetings that tie up his 16-member executive team. He constantly reviews IT projects to make sure they're delivering a measurable business value, and he sets ever-higher standards for results. He's got, well, a bit of a short fuse. But he's also won the deep loyalty of his team by setting a vision for IT's place in the business and, when necessary, fighting to make it reality. "Ralph's one of the bravest and boldest CIOs I've worked with," says GM North America CIO Daniel McNicholl, who's worked for Szygenda for six years. "When he knows something's right, he'll take on God himself."

When Szygenda took the IT helm at GM, he had to create an executive technology group because there was no CIO, and EDS essentially ran IT for GM. He set his standards high. "All of the people reporting to me were CIOs at other companies with a lot of experience working with vendors," Szygenda says. He built an organization designed to create tension, picking IT executives he knew would challenge him and each other, and then having each of them also report to a business-unit executive. Szygenda makes decisions on big-picture, strategic directions, but not until he's heard a heated discussion. "Ralph's always got to have two sets of eyes looking at something important. That's a minimum," says Clifton Triplett, GM's information officer for manufacturing and quality. "Ralph likes tension."

Not surprisingly, the first several months of the transformation were intense. "We all thought, 'What did we get ourselves into?'" chuckles Kirk Gutmann, the CIO for global product development and service, who flies about 200,000 miles a year visiting GM facilities in 30 countries. "I knew if we could turn this thing around, there would be a high return. But there's no question there was a downside."

Plenty of people saw nothing but downside, convinced that GM would never change. Szygenda himself spent several months interviewing top GM executives before he signed on, gauging their commitment to change. But the common personality trait of Szygenda's team is a thirst for challenges that look insurmountable--and they haven't been disappointed. "I love going into a job where I don't know if I can do it," says McNicholl, the former VP of Whirlpool Corp.'s heating and air-conditioning business. "Build a new IT organization from scratch? Y2K right around the corner? It was that 'Oh my God' experience that made me want to do this."

Imagine a meeting room with 16 strong-willed business and technology executives who all have run their own shows for years. Szygenda may like tension, but he recognized the potential for problems. He hired executive coaches to conduct team-building exercises--including one in which the execs said something about themselves, and the others decided whether they were lying--and psychologists to analyze how the staff interacted at meetings. He organized off-site social activities, including ball games and fishing trips to northern Canada, so the executives got to know one another. And there's no shortage of on-the-job interaction, including the Friday team meeting that runs from 7:30 a.m. until about 2:30 p.m. and can get intense as executives report on project status. "There are moments of high energy," Gutmann says.

Szygenda changed his management style as GM's situation changed, says Gutmann, a former VP for Navistar International Transportation Group. In the early days, "Ralph had his hands on every lever," he recalls. GM has successfully tackled its most basic IT operating problems, such as installing a common PC desktop system, junking about 3,500 disconnected IT systems, and consolidating its 23 incompatible computer-design systems to one Unigraphics system. That's allowed the team to laugh a bit more often these days and to savor some success. The M.O. now: "To have fun by winning at business," Szygenda says.

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