How eight firms transformed - with technology.

• Author: Vincent, David R.
• Position: Information Management

As your business changes, you keep looking for that one ingredient that pushes you ahead of your competition. Is the key in mastering information technology?

During the 1980s, American corporations got a wake-up call for quality. Those that responded substantially improved their businesses, even in hard times. Today, the wake-up call is for total business transformation. This time, those that don't respond may not even survive.

Today's business literature is filled with articles on total quality management, continuous improvement, just-in-time inventory management, flattening the organization, business process re-engineering and employee enablement and empowerment. Collectively, these represent the beginnings of total business transformation.

There's just one problem. People don't like change, and organizations strongly resist it. For change to occur, companies first must perceive an external threat to the business and then they must act on that threat, using the best tools they have. Some companies think taking advantage of their information technology, or IT, capabilities is a good start. But is it enough?

What transformations are taking place in businesses today, and what role does information technology play? Top financial and information executives from eight corporations that are pioneering business transformation tell their stories.

ELECTRONICS

Motorola, Inc. Kenneth J. Johnson, Corporate Vice President, Controller and Director of Audit Les Shroyer, Corporate Vice President of MIS and Telecommunications

Motorola's business transformation is now in its second decade. In the early 1980s, our industry began to realize--as told to us during customer visits--that our quality could be improved, from our products and services to our invoicing. Because of this, we believed other competitors, including the Japanese, would make inroads into our business unless we significantly addressed the quality issue. That's why we initiated our "total customer satisfaction" program.

Management set out by educating every employee in every aspect of the business in quality management. In fact, education was the largest investment that Motorola made in transforming its business.

Top management not only supported the transformation--the executives went out of their way to signal the change whenever possible. Robert Galvin, former chairman of Motorola, emphasized the importance of quality by example in monthly management review meetings: He asked for the quality information to be presented before the financial data. When the quality presentations were finished, he left the meeting.

The cornerstone for our transformation has been having aggressive goals at all levels. For example, Motorola has doubled its sales in the past five years with the same number of employees. In fact, rapid sales growth continues to be a management direction, as we target such underdeveloped markets as China, India and Brazil.

In the first five years of our quality program, Motorola had a goal of "100x," or one hundred times improvement, moving toward six sigma (three defective parts per million). We found that setting such aggressive targets encourages people to change or re-engineer processes. They can't meet the aggressive goals any other way!

After achieving the initial six sigma target, we began to look into cycle times. We now have targets to reduce the length of these cycles by 10 times by 1997.

We didn't have to look for IT's role in Motorola's transformation. People throughout Motorola came looking for IT. They desperately needed help in linking diverse technology platforms that ran independently throughout the company. One of the major roles that IT played at Motorola was to enable us to quickly collect and share nontraditional information. The MIS Department changed the computing environment from that of working on a mainframe to one of supporting and linking a variety of dispersed computing technologies.

But the new IT emphasis on networks and information sharing didn't come easily. Members of the IT staff had to develop new skills or, when necessary, we had to bring in the new skills from the outside. Catching up with demand was a major effort. Our advice to IT executives: Anticipate the demise of traditional mainframe systems and long development cycles. You must position yourself to deliver IT products with 10-times reductions in cycle time to keep up with today's user demand.

AUTOMOTIVE

The threat to survival in the automotive business is getting a lot of attention in the press lately. Chrysler's brush with bankruptcy and General Motors' current restructuring are just outward signs of an American industry struggling in the global economy. Ford recently announced a $7-billion loss for 1992, due...