Consistent" and "innovation" aren't generally uttered in the same breath. Consistency is defined by steadiness, an even-handed conservatism, harmony; innovation implies convulsive change.
But consistent innovation is the hallmark of the companies that make up InformationWeek's Magnificent Seven--the seven companies that ranked the highest, by average, on the InformationWeek 500 list over the last five years.
Several of the Magnificent Seven have technology at the core of how they conduct their business, but even those that don't share a common vision of the central importance IT holds in driving business forward.
E.&J. Gallo Winery, first among the Magnificent Seven, exemplifies consistent innovation. Gallo has placed within the top 50 on the InformationWeek 500 every year since 2003 and was our No. 1 company in 2004.
No. 2 on the Magnificent Seven is Bank of New York Mellon, created from the merger of Bank of New York and Mellon Financial Services in a $16.5 billion deal that closed earlier this year. Mellon Financial Services scored in the top 50 on the InformationWeek 500 four out of the last five years, ranking 18th in 2004. One area where Mellon prides itself, and one that's a hallmark among the Magnificent Seven, is customer service. "All IT people are cognizant about how what they do affects external customers," says Peter Johnson, senior VP in charge of enterprise architecture and shared software components. "And a lot, including myself, speak to external customers directly."
Third is Principal Financial Group, a leading provider of insurance and financial services and the No. 1 company on last year's InformationWeek 500. A large part of Principal's success can be attributed to the value management places on IT. "We rarely talk about IT as a cost center," says CIO Gary Scholten. "IT funding is always talked about in terms of an investment."
Scholten strives to have technology ready "before the business comes and asks for it." Principal's IT department started working on mobile technology before its business advantages for the company were apparent. Now one of its most innovative customer-service efforts is a feature called Worksite, where sales reps use mobile technology to go online during sit-down meetings with a company's employees, even on shop floors, to view their investment status.
FedEx, another member of the Magnificent Seven, has demonstrated its business technology chops year after year. One of FedEx's most ambitious IT initiatives over the last few years was a project known as 6x6, the brainchild of CIO Rob Carter. The 6x6 objectives speak to the company's pragmatic approach to technology: Establish global IT infrastructure standards and processes; deliver IT solutions more quickly; target IT spending to help customer satisfaction; partner with FedEx's business units; rotate IT workers to different positions regularly; and simplify information access through a company-wide data integration project.
Unlike FedEx, General Motors isn't known as a tech innovator--except by those who know Ralph Szygenda. GM's CIO inherited a suffocating outsourcing deal with EDS and inefficient and inconsistent processes. Szygenda streamlined the automaker's IT systems and rebid the outsourcing work to be shared among multiple IT service providers with the requirement that they employ standard processes. The result: GM cut $800 million in IT spending and reduced the time it takes to get from concept car to finished product, formerly four years, to 18 months.
Wyeth, sixth on our list of overachievers, has used IT to cut costs and improve service to its distribution partners. In 2003, Wyeth became one of the first domestic pharmaceutical companies to outsource management of its clinical trial data offshore, to an Accenture facility in Bangalore, India, a risky--and controversial--move. In 2004, Wyeth introduced a supply chain feature it calls "customer-specific scorecards" that measures logistics performance from receipt of purchase orders through delivery of products, and then shares that information with its distributors to help root out problems.
Consistency is the watchword at Equifax, No. 7 on our list. One of three major credit-data reporting companies in the United States, Equifax ranked third on the InformationWeek 500 in 2005. "We're all about delivering the transactions every day," CIO Rob Webb says.
The company is all about using IT to create new products for its customers, both consumers and commercial institutions, including 30 of the top banks in the United States. The company does that through a series of "Growth Council" meetings and new product reviews that include business and IT execs. Over the past year, Equifax has introduced more than 50 new products around the world, built using its core proprietary data. "Our technology strategies and business strategies are one in the same," Webb says.
For these seven companies, consistent innovation doesn't mean dabbling with bleeding-edge technology; it means delivering results. The most important thing about being innovative, says Bank of New York Mellon's Johnson, "is that it's relevant to customers and products."