M'm! M'm! Better!
It might seem like a strange statement, but the Campbell Soup Company owes some of its recent success to one of its competitors. If it wasn't for the acquisition of Nabisco by Kraft Foods back in 2000, Douglas Conant and Doreen Wright may not have been free to join Campbell as top executives. Conant joined the company in 2001 as president and chief executive officer, and with the help of his executive leadership team, began intensive analysis in order to revitalize Campbell. After being a top-performing company in the S&P Food Group for much of the 90s, Campbell found it difficult to sustain its growth. Conant and the Campbell leadership team developed a transformation plan to get the company back on track.
One of Conant's leadership principles is to get the "right people on the bus," and he recognized that one of the key functions in facilitating the transformation would be technology and driven by the CIO. Conant and Wright had been colleagues at Nabisco --he was President of Nabisco Foods Company and she was executive vice president and chief information officer. He explains, "When I joined Campbell and needed to add talent to our executive leadership team, I immediately thought of Doreen. She was the type of leader the company needed. Doreen has the right mix of leadership and communication skills, in-depth knowledge of technology and strong business acumen, all of which are critical to being an effective CIO."
Hence, Conant called Wright within a few months of his joining Campbell and asked her to do an assessment of the IT function. She said yes, but with one caveat: She would not join the company on a permanent basis. It was simply a matter of an impractical commute -- about two hours in each direction. One thing Wright says about herself (see sidebar) is that she is decisive; accordingly, the prospect of her joining Campbell full time was unlikely.
She was about six weeks into the IT project when something changed. "I got so excited about Campbell and what Doug wanted to do -- he is an exceptional leader; there are very few people like him -- he truly is a people person. When he says workforce engagement or employee satisfaction is the driver of marketplace performance, he really means it and he lives it everyday," says Wright. She continues, "I thought -- when will I ever get the opportunity to work for someone like this again?"
Another philosophy Wright has about decision making is that if it is not the right decision, you make another, and that is just what she did. She joined Campbell -- four-hour commute and all. She did not relocate because her children were well established -- one in high school and one in middle school. She explains, "There was no way I wanted to disrupt them. Their lives are just as important as mine. In fact, I think they are more important." Six years and countless miles later, she is finally moving closer to Campbell's world headquarters in Camden, New Jersey.
Role of IT
The way IT is regarded at Campbell influenced her decision to join the company and is part of what she asserts makes it a great place for her to work. Wright explains, "IT is truly viewed as an equal to the businesses and other functions. It's the way Doug structured the company." The corporate leadership team is comprised of the most senior business leaders and most senior function heads, which operate as a very cohesive team, according to Wright. Indeed, Campbell does not execute projects without considering IT. For example, Wright has been involved in a number of acquisitions and divestitures in her tenure. From the moment a decision like that is made, the functions are involved in planning and execution.
The way IT is regarded at Campbell influenced her decision to join the company and is part of what she asserts makes it a great place for her to work. Wright explains, "IT is truly viewed as an equal to the businesses and other functions. It's the way Doug structured the company." The corporate leadership team is comprised of the most senior business leaders and most senior function heads, which operate as a very cohesive team, according to Wright. Indeed, Campbell does not execute projects without considering IT. For example, Wright has been involved in a number of acquisitions and divestitures in her tenure. From the moment a decision like that is made, the functions are involved in planning and execution.
And this comes right from the top down. Wright explains, "The people who report to me also report into the business line presidents. The way my team is structured, my reports include the head of IT for Pepperidge Farm, Godiva, Europe and so forth, and they also sit on the leadership teams within their businesses. IT is not just respected at my level -- IT is respected throughout the organization. The IT leader is viewed as the business process expert and project management expert, as well as the IT functional expert."
She says IT leaders contribute well beyond IT. Wright comments they are not "techies," but think and contribute like business leaders. If Campbell decides to, for instance, reengineer a business process such as S&OP, it is not unusual to have an IT leader spearheading that effort, even if technology is not required. "I think you are going to see the role of IT leaders -- not just at Campbell, but in many industries -- evolve much more to business process leads. After all, when you put in a system, such as SAP, you are not just putting in a computer system, you are really redesigning business processes from front to back," states Wright, citing the company's new centralized ERP system.
A Stint in HR
Wright was with Campbell for about a year when the head of human resources (HR) left the company. Conant asked her to take on the role temporarily, which she did in addition to running IT. "How many places do you think that can happen?" she asks. "Doug trusted me and knew I had strong process and project management skills along with the ability to take a complex issue and divide it into pieces. He felt I could not only keep the place running, but also move it forward. It was an extraordinary experience for me," she reveals.
Wright was with Campbell for about a year when the head of human resources (HR) left the company. Conant asked her to take on the role temporarily, which she did in addition to running IT. "How many places do you think that can happen?" she asks. "Doug trusted me and knew I had strong process and project management skills along with the ability to take a complex issue and divide it into pieces. He felt I could not only keep the place running, but also move it forward. It was an extraordinary experience for me," she reveals.
Wright calls it "transformational" in that it provided her with an entirely different view of what a CEO does. Since there is no peer or counterpart at the CEO level, CEOs tend to work very closely with the head of HR, and so she saw the company from a very different perspective.
How ever unplanned, taking on this role represents another facet of how Wright contributed to Campbell's transformation. She notes, "During that year, we restructured the company and filled many senior positions. I focused on a lot of organizational effectiveness work, and it has had a profound impact on me. I left the role with a newfound respect for the HR leadership role." She does add that she was glad when it was over, so she could go back to the world of IT, which is what she knows and does best.
Back to the Transformation
Even though Campbell was a great company with a lot of iconic brands, for many reasons, according to Wright, the prior management team decided to "optimize cash flow." Thus, parts of the company, including various functions, had gone through a period with limited or no investment. She says, " In many ways, when Doug joined Campbell the company, was at a low point after having a decade of stellar performance. He decided to reinvest in the business, strengthen it again, move it forward and build the world's most extraordinary food company."
Even though Campbell was a great company with a lot of iconic brands, for many reasons, according to Wright, the prior management team decided to "optimize cash flow." Thus, parts of the company, including various functions, had gone through a period with limited or no investment. She says, " In many ways, when Doug joined Campbell the company, was at a low point after having a decade of stellar performance. He decided to reinvest in the business, strengthen it again, move it forward and build the world's most extraordinary food company."
Developing a firm vision and strategy for the company as a whole and for individual businesses was one of the first challenges the Campbell leadership team faced. "In the interim, it was still possible for the functions to figure out what you would need to do -- what basic capabilities were needed -- regardless of what the ultimate strategies would be," Wright recalls.
Campbell needed to add new business functionality quickly (going into a new business or new market). The company had acquired several businesses through the years and operated them in a "classic decentralized organization." Wright believes you can look at an IT function and it will tell you a lot about a company. At Campbell, there were more than 1,400 applications and interfaces at the start of the transformation, which indicated limited technical governance. She says they also had very little data to help make good decisions, or just very little data overall; they also needed to be more agile, to expand the supply chain to include Campbell's customers and suppliers.
"My approach for IT was to do our own self-assessment. I was the first global CIO and so we conducted a global self-assessment and got many associates involved in the process," Wright says. She calls IT "relatively small at the time," with 400 to 450 people globally. (By that time, Campbell had already partially outsourced infrastructure operations.) They analyzed the organizational structure and competencies in each of the businesses -- Europe & Asia Pacific were run geographically, but the United States was run by individual businesses, for instance.
Looking at the structure of each of the locations and the competencies, she says they inquired: "What are you good at?" She asked them to outline their technical environments and application portfolios, which incidentally, is when she discovered the company's 1,400 applications. "Then we picked an organizational model I believed would work for the company -- a Gartner model known as 'IS Lite'-- which calls for the central management of strategy and governance, the centralization and, where appropriate, outsourcing of shared technical functions and a high use of common processes and systems across businesses," Wright explains.
Further, according to the IS Lite model, those services that touch the customer or business lines, are kept within the business. In moving toward that model, they examined the competencies required to operate in such an environment versus the actual competencies identified through the self-assessment process. The gap was apparent and became the starting point.
Involving the Interested
Wright knew one of the keys to success was to get Campbell's associates on board and to create a common understanding of the imperatives across the IT groups and across the businesses. It was critical that everyone involved feel a part of what the change initiative would be. "I think the biggest mistake managers make when they are planning a big change is to go off into a corner and design what they are going to do and then implement it. People feel like something is being done to them versus being a part of those decisions," Wright asserts.
Wright knew one of the keys to success was to get Campbell's associates on board and to create a common understanding of the imperatives across the IT groups and across the businesses. It was critical that everyone involved feel a part of what the change initiative would be. "I think the biggest mistake managers make when they are planning a big change is to go off into a corner and design what they are going to do and then implement it. People feel like something is being done to them versus being a part of those decisions," Wright asserts.
As is common, there was some internal resistance and within about six to 12 months, Wright mentions, some of the IT leadership had to be changed. It was a case of retaining those leaders who were "getting on the bus" and demonstrating they were open to this kind of change. Others who struggled with the change went to organizations that better fit the type of leader they were.
With the right IT leaders for Campbell in place, Wright says they focused on five areas: Defining the leadership principles -- how they would operate with each other; how they would organize; how they would adopt global processes; how they would strengthen technical governance; and how they would strengthen security and controls.
The first thing that needed "attacking" was the infrastructure. "It was spaghetti," she says. "We needed to define and implement a new technical architecture, a technology lifecycle management process, standardize our WAN/LANs, automate asset management and develop a master applications blueprint."
Principles Formed
There were no formal standards when it came to IT decision making, and Wright says it was necessary to come up with principles to drive policy decisions globally. Once in place, every time a decision had to be made, it would have to be in adherence with the set principles the IT leadership team established. These guidelines are: Seek company-wide solutions; share solutions when possible; seek efficiencies where possible; ensure interoperability, making certain the infrastructure is reliable, secure, cost effective and can operate anytime, anywhere to meet a business need.
There were no formal standards when it came to IT decision making, and Wright says it was necessary to come up with principles to drive policy decisions globally. Once in place, every time a decision had to be made, it would have to be in adherence with the set principles the IT leadership team established. These guidelines are: Seek company-wide solutions; share solutions when possible; seek efficiencies where possible; ensure interoperability, making certain the infrastructure is reliable, secure, cost effective and can operate anytime, anywhere to meet a business need.
Over time, other functions at Campbell adopted similar principles. Historically, the businesses were vertically integrated and all of the decision-making authority was with the head of the business. Horizontal communication came once the company started to operate with both business leaders and cross business function heads in place. A function head is responsible for ensuring the processes work across businesses, are optimized and reusable, and wherever possible, are common.
Wright gives a simple rule of thumb -- the businesses decide "what," the functions decide "how" and together they decide "when." "This was new to Campbell, but not new to me. I can't remember when I didn't operate this way; it was not hard for me to drive this kind of a change because I was so familiar with it," says Wright.
And though she could have written the principles herself, instead she worked with the IT leadership globally and developed them as a team. This goes back to Wright's practice of bringing the team with her rather than doing something to them.
Working as One
Improving global coordination and interoperability means adopting common processes and though this sounds simple, Wright says it was not. "We agreed company wide to do our strategic planning and operating plans the same way. This was a big step."
Improving global coordination and interoperability means adopting common processes and though this sounds simple, Wright says it was not. "We agreed company wide to do our strategic planning and operating plans the same way. This was a big step."
IT also adopted a common project nomination and investment decisionmaking process. Working with Tom Murphy, a consultant with IT Quest, IT developed a portfolio model to select and de-risk projects.
Wright walks through the process. "To do a project in IT of any magnitude the benefit must be confirmed and the value it will bring to the business outlined; then it is evaluated against a set of criteria." One axis is value to the business -- a lot of criteria falls under this heading and Wright worked with the CFO and controller to define what the measures are (for example, financial, customer service, strategic enablers, among others).
The other axis is the ability to execute, which Wright says is more important -- particularly at that time. "You can come up with the best strategy and the best project, but if you can't execute it, why would you undertake it? It is such an obvious thing, but you see it happen everyday. Companies can waste millions of dollars by developing great strategies that can't be implemented."
This model is in place globally and every project with an IT component is evaluated against it. Over time, Wright notes, it was a differentiator for Campbell. "It allowed us to knock out the little stuff that did not add business value and enabled us to look at the bigger initiatives, understand the risk right up front and take action." If a project was evaluated and it was determined it was not in the right quad because theoretically it had low business value or low chance of success, but it absolutely had to be done, adjustments could be made.
Wright says, "You could take the evaluation within the model and use it as a way to identify where the risk points and weaknesses were and work the issue until you could move the project to the right spot. When I look back on all of our early decisions, this was one that really made a difference."
Outsourcing
Outsourcing was another challenge Wright had to tackle. Campbell was partially outsourced to IBM on the infrastructure side, but there was no overarching outsourcing strategy in place. She explains that the U.S. business had made a decision to outsource some functions, while other parts of the world outsourced others. When she arrived, the relationship with IBM was not healthy because a series of CIOs had different agendas for this relationship.
Outsourcing was another challenge Wright had to tackle. Campbell was partially outsourced to IBM on the infrastructure side, but there was no overarching outsourcing strategy in place. She explains that the U.S. business had made a decision to outsource some functions, while other parts of the world outsourced others. When she arrived, the relationship with IBM was not healthy because a series of CIOs had different agendas for this relationship.
Three CIOs ago, someone decided to outsource for cost. The next CIO didn't like the arrangement so he created a shadow organization. "This sets you up for failure in an outsourcing relationship; you can't have more than one group or person performing the same function," says Wright.
The relationship has since turned around, and Wright says she highly values IBM. "We have an outstanding relationship with IBM that is very strategic," she notes. In dealing with outsourcing, Campbell had to come up with additional principles around what would be outsourced and how they would make those decisions. At the same time, she had to rework the outsourcing relationship top down to discern how to make it strategic. That meant connecting IBM with Campbell's business leadership as well -- not just IT. "Your outsourcing partner has to understand the whole of your business so they can deliver against your business objectives," Wright maintains.
Once the relationship was stable and strategic, Campbell actually outsourced more. IT adopted the principle that if a function or service is non-core to the business, and if it is not touching the customer or business partner directly, it is a candidate for outsourcing. "We would consider outsourcing anything that could be done as well or better for the same cost or less," she says.
About three years ago Wright indicates they took a year to redo the contract with IBM, even bringing in a third party to help. "We all sat down and looked forward five and 10 years and asked 'what are we going to look like; what are we going to need?'" explains Wright. She knew they were going to put in SAP and that meant the IBM team would need new skills and people. Wright says they worked together to envision where Campbell was going, and it drove a lot of other decisions around what would go out what would come in house. They intend to formally review the strategy every few years.
Wright views IBM as a true partner and says Campbell uses IBM extensively for operations, application maintenance and for large scale integration. "But at the end of the day, the success of an outsourcing relationship has much more to do with people and the operating principles. Just as you decide how to operate internally, you have to do decide how to operate with your outsourcing partner. They must be an extension of you," she concludes.
Centralizing the System - SAP
Next they had to ask: What would be centralized? "We came up with a construct where some applications would be global -- they would run in one place and they would support multiple businesses; some would be shared -- if one group ran a system and another needed the same functionality you would give them a copy of the same system and it would be managed locally; and local -- a system that was truly unique to that business, like POS systems at Godiva. They are our only retail business; there is nothing to share," Wright explains.
Next they had to ask: What would be centralized? "We came up with a construct where some applications would be global -- they would run in one place and they would support multiple businesses; some would be shared -- if one group ran a system and another needed the same functionality you would give them a copy of the same system and it would be managed locally; and local -- a system that was truly unique to that business, like POS systems at Godiva. They are our only retail business; there is nothing to share," Wright explains.
SAP will be completely global and is already live with all of Campbell's businesses in North America. Pepperidge Farm is next to go on this version of SAP. When Campbell looked at processes that had been customized, Wright says they realized most were not necessary -- Campbell processes can be adopted. "We were very strategic, when we started the SAP project; we started with a global framework involving people from around the world at pretty high levels to determine what SAP would cover. When we got to blueprinting, we did it for all of North America instead of breaking it up by business. The overwhelming majority of functionality within the system is the same for all. Recognizing this up front, we built for everybody," Wright says.
And More
From a security control perspective, Wright notes there are not standards for the consumer goods industry on how to do control self-assessments. But her extensive background in financial services led her to implement COSO level standards, control self-assessments and documentation of control points. Lucky for them, Wright says, "When Sarbanes-Oxley came, we were pretty far advanced. People really got it and the IT organization was well-versed."
From a security control perspective, Wright notes there are not standards for the consumer goods industry on how to do control self-assessments. But her extensive background in financial services led her to implement COSO level standards, control self-assessments and documentation of control points. Lucky for them, Wright says, "When Sarbanes-Oxley came, we were pretty far advanced. People really got it and the IT organization was well-versed."
After Campbell strengthened and standardized the infrastructure and the outsourcing relationship they were able to get into the key applications. "Our investments are aligned to our company strategies and have been a balance of strengthening our foundation (infrastructure and security), and building business capabilities across a wide range of process areas," Wright says. A new trade management system has provided a higher degree of confidence in managing promotional activity and better insight into customer demand. It was a very big project and "has paid for itself many times over."
This year, the vast majority of SAP will be completed in North America. SAP will then be implemented globally, which will take the next couple of years. The company has also done a lot of work around RFID, collaboration and synchronizing data with all of its major customers. Campbell was recently recognized for its success in this area.
The company also implemented an indirect procurement system and a first generation corporate portal (now putting in the next generation). Other strategic programs within the company in which investments are being made include: Product development, S&OP and employee self service. And although IT is a component within most project benefit realization models, more typically, of course, there is a direct business benefit associated with an IT project.
The Results and the Future
Campbell is winning in the marketplace and the workplace. Its products -- from new lower sodium soups to single-serve Goldfish packs -- are enjoying success; the company is achieving its business and financial goals; shareowners are enjoying excellent returns; and employee engagement at Campbell is high and improving.
Campbell is winning in the marketplace and the workplace. Its products -- from new lower sodium soups to single-serve Goldfish packs -- are enjoying success; the company is achieving its business and financial goals; shareowners are enjoying excellent returns; and employee engagement at Campbell is high and improving.
Wright affirms, "I like Campbell more today than the day I joined and I truly believe in the company. You can consider a lot of different indicators of what has happened, but just look at our stock price. I remember the days when we were trading at about $19 per share and now we are close to $40. We have worked so hard on this turn around -- every person in this company. It really is a great place to work."
She comments that everybody has a Campbell's story and no matter what she is doing or where she is, say at the local bank, when they find out she is from Campbell, there is a story that starts: "When I was a little kid . . ." Wright doesn't mind: "It's nice to work for a company that has a noble heritage and a great brand; I wanted to work in a place where I knew there was going to be a high level of integrity; I am very proud of Campbell and the work we do." As for her "boss," he credits her for being a force in actualizing this culture. "Doreen has made a difference at Campbell and is creating quite a legacy of excellence," says Conant. CG