The World's 10 Most Influential and Innovative Companies

David Hunkar, Seeking Alpha, December 25, 2008 

The December 22nd edition of Business Week published an article titled “The World’s Most Influential Companies”. As per Business Week, “they are the innovators and front-runners that are shaping business today”. 

The following is a brief overview of the the top ten companies from the list. These 10 companies “have devised winning strategies in their industries. They are the ones with the game-changing ideas, the greatest impact on consumers, and the bold tactics rivals emulate. None is infallible or without controversy”. Five of the 10 companies are US-based. 

1. Apple (AAPL) is a Cupertino, California-based maker of many technology products like cool laptops, iPhones, iPods, etc.that are “imaginative, irreverent, and pleasing to the eye”. Apple’s annual sales are $24.0 B. AAPL does not pay a dividend. After reaching a high of $200 in January, the stock closed for $85.04 yesterday. Annual revenue growth in the past 5 years is 39.23%. However, sales may not continue at this pace due to the economy being in recession and many folks who own iPods, iPhones do not find the need to replace them. 
   
   
2. Google (GOOG) is the world’s top search engine. It processes “3,000 queries per second in the U.S. alone”. GOOG has a P/E of 19.07 and does not pay a dividend. Late last year the stock reached a peak of $716. Yesterday it closed at $302.95. 
   
   
3. Huawei is a Shenzen,China-based maker of “networking equipment, cellular handsets, and other telecommunications gear. Huawei’s stock is not listed in the US markets. The company competes against other network equipment makers like Nortel (NT), Alcatel-Lucent (ALU), Cisco (CSCO),etc. Annual sales are $12.6 billion. 
   
   
4. JPMorgan Chase and Co (JPM) is one of the so called three giant “superbanks” that dominate the financial industry in the USA. JPM currently pays a dividend of 5.22%. In September,Chase bought the failed West Coast bank Washington Mutual (WaMu). 
   
   
5. St. Louis-based Monsanto (MON) is “a global provider of agricultural products for farmers”. Business Week said, “About 97% of U.S. soy is now grown using Monsanto technology, and the company’s insect- and herbicide-resistant corn and cotton have become the default standard for U.S. farmers”. The current yield is 1.45%. 
   
   
6. News Corp (NWS) is is one of the world’s largest media conglomerates. In the US, News Corp. owns many newspapers including The Wall Street Journal, New York Post and the Fox TV news channel. NWS pays a dividend of 1.36%. 
   
   
7. The oil company Saudi Aramco is based in Dhahran, Saudi Arabia. Annual sales are $210 B. As the world’s largest oil producer it “ships around 8 million barrels to industrial powers” everyday. Saudi Aramco does not trade in the USA. 
   
   
8. Toyota Motor Corp (TM) is one of the world’s largest auto makers. TM’s current yield is 4.8%. While revenue increased annually about 11% in the past 5 years, this week Toyota announced that auto sales plunged 21.8% in November, the biggest drop in 8 years. The company also projected that it will report its first operating loss in 70 years due to the current slowdown in the global economy. 
   
   
9. Unilever PLC (UL) is one of the parent companies of the Unilever Group (Unilever) with headquarters in London, UK. Unilever owns brands such as Dove, Lipton, Vaseline, etc. and they are popular in many emerging countries such as India and Brazil. Unilever was successful in marketing its products to poor consumers by making the packages very small and setting the price accordingly. The P/E is 9.48 and the yield is 2.91%. 
   
   
10. Wal-Mart Stores Inc (WMT) is the world’s largest retailer. The company operates the Wal-Mart Stores and Sam’s Club in the USA. Sam’s Club’s sales accounted for 11.8% of total net sales in 2008. About 100 million Americans visit its stores each week. WMT pays a dividend of 1.72%.
    

Unilever uses SFIAplus to get more from its IT skills

Rebecca Thomson, ComputerWeekly.com, 19 Dec 2007

Unilever has adopted an IT career framework to help managers and employees understand IT skills and capabilities within the company.

The firm, which owns brands such as Hellman's, Knorr and Domestos, hopes the framework will help it to exploit IT more effectively by making it clear what skills are available.

The intranet-based framework was created using a best practice model from the British Computer Society. The company used SFIAplus, which contains the Skills Framework for the Information Age model, to make it clear what IT roles were needed and the development necessary to fulfil these roles.

Work on the career framework started in 2006, when a cross-regional team identified 10 "role families" from the 78 skills held in SFIAplus. Role profiles were then created for each of the role families and aligned to a future IT function.

The functions were created using browser-based skills manager software from the BCS.

Employees can now access the profiles and compare their own IT skills to those required for either potential or current roles. They can then enrol on to a relevant development programme to reach the required skills level as well as gaining appropriate external accreditation.

Daryl Beck, director of Unilever's IT academy, said, "It is all about enabling Unilever to gain competitive advantage through IT. For the members of the IT team it is about having the right qualifications, being professional, and enabling the business to move forward."

He added that the changes were part of a business change at Unilever. "Over the past two years we have been putting in a new IT model, and this has enabled that new group to understand what was expected of them."

The challenge, he said, was to convince employees of the benefits. "It is not just a sheet of profiles, it is a change programme. People do not like change, and the biggest challenge is convincing people this is what they should be using.

"We have had to spend a huge amount of time this year talking to people about the benefits of the framework and new skills."

CIO Must Read: "Breakthrough IT"

In his new book, consultant Patrick Gray examines how to take your IT organization from a cost-centric services provider to a valuable business partner. Here's a hint: Do your homework.

John Soat, Informationweek.com, Dec 17, 2007 08:17 PM

Gray is the president and principal of the Prevoyance Group. "It means foresight in French," he says. "And there was a domain name available." His new book is "Breakthrough IT: Supercharging Organizational Value Through Technology" (John Wiley & Sons; 2007), a detailed outline, including chapter summaries and action items, of how to transition IT from a corporate utility to a strategic asset.

On the book jacket, Mark Lutchen, CIO of PricewaterhouseCoopers, describes the book this way:

• As business changes, so, too, does the role of the CIO and the overall IT organization. In "Breakthrough IT," Patrick Gray provides a necessary road map for shifting IT from an operational entity that simply manages technology, to a powerhouse that combines strategy and technology to deliver measurable business results and long-term value.
  
  

I talked with Gray to get some insight into how he sees the role of the CIO having to change to accommodate "breakthrough IT," and what CIOs should do to accelerate that change.

The first thing, Gray says, is a mindset makeover. "The CIO has an asset no one else has: Visibility into the whole organization," he says. "The CIO has more of a vision into the organization than anybody else." Unfortunately, CIOs haven't traditionally thought of that enterprise view as something they can leverage.

In fact, the biggest obstacle to CIOs moving into positions of strategic importance is that they're used to being thought of as "operational" types -- and of thinking of themselves that way. "It's a matter of getting out of that operational mode, and of thinking of IT as a [business] tool in and of itself," Gray says.

Another factor that keeps CIOs out of the business strategy circle is that the CIO position isn't thought of as a developmental role. CIOs mostly come up through the technical ranks and that's all they really know, he says. They're not groomed to be C-suite leaders like other CXO positions. If you go to Wharton or Sloan, for instance, and talk with a hundred of their MBA types, only one or two may aspire to be a CIO. "Companies need to pitch the CIO as a valuable C-level position," he says.

So what can CIOs -- and those who aspire to be CIOs -- do to make themselves more strategic and less operational? "The biggest thing: Get out of technology for a while," he says. "Get some experience where IT is not your primary focus."

As for transitioning your IT organization from a cost-centric services provider to a business partner, the first step is getting the services piece right. And that means getting IT to a high service level, and then getting it out of the CIO's purvey. "That's something a middle manager should handle," he says. It's important to get the CIO out of the mode of constantly fighting fires. That way, the CIO can have these "Aha! moments," where he or she might see, for example, that the company is going into a new market and that the ERP system that was just put in won't accommodate that market very well, Gray says.

Another important point: CIOs need to do their homework about the companies they work for. CIOs aren't usually experts on the company's products or markets, Gray says, and they need to be in order to realize, and be able to explain, the true value of IT across the enterprise. "It's a big shift in focus," he says. The CIO needs to go "from being a pure technologist to being a student of the business."

And CIOs need to insert themselves into areas not traditionally thought of as involving IT. For example: product development. "I think there's a space in product development for IT," he says.

The main thing is for CIOs to get out of the mindset of being simply technologists and services providers, and into the mindset of being business executives and strategists, Gray says: "Then the CIO can make the argument [to upper management], 'Hey, you're spending all this money on IT. What more can we do?' "

The Evolution Of The CIO

The role of the CIO is at a critical point of change. It's time for CIOs to step up -- or step back.

By John Soat, InformationWeek, Nov. 17, 2007

At the annual meeting last month of the Society for Information Management, rumor had it that a bombshell was buried in the results of the organization's annual IT management survey. And so there was: The percentage of CIOs and other top IT executives reporting directly to CEOs had fallen dramatically from the year-earlier survey, SIM revealed.

Last year, 45% of the business technology executives surveyed said they report to the CEO; this year, it's just 31%. At the same time, the percentage of CIOs reporting to the company CFO has risen, to 29% from 25%.

The implication? The CIO's influence is waning. "If the CEO number is going down, clearly [CIOs are] losing traction," says survey principal Jerry Luftman, associate dean of the Graduate Information Systems Programs at the Stevens Institute of Technology. "I'm hoping it's a blip."

Another interesting result nestled in the SIM study suggests that IT execs aren't feeling altogether secure. For the first time in the 27-year history of the survey, execs were asked about "the evolving CIO leadership role," and they cited it among their top concerns--No. 10, precisely--indicating some uncertainty about how and where they fit within their organizations.

Whether the SIM data is an early indicator or a blip, there are signs that the CIO role is at a crossroads. "The non-business-oriented CIO is about to take a shift down a tick in the reporting structure," predicts Bobby Cameron, a principal with Forrester Research. M.S. Krishnan, chair of business information technology at the University of Michigan's Ross School of Business, presents it as a challenge. CIOs are "going to step up or they're going to step down," he says. "They cannot be where they are."

Because customers will increasingly have more choices, and because of globalization, companies will be forced to change their business models, says Krishnan, who with partner C.K. Prahalad is writing a book on the subject. As part of that transformation, CIOs have an unprecedented opportunity to seize control of their careers and help chart the future of their companies, he says. In order to innovate rapidly, a company's business processes must be docu- mented, understood, and governed, and where does responsibility for most of those processes lie in the modern-day, automated business organization? The CIO.

"It's IT that runs every business process today," Krishnan says. "And while the IT department takes the responsibility for running those processes--the applications are doing fine, transactions are going great--they don't take ownership."

But somebody will take ownership, he predicts, and soon. "As companies become global, this will become a critical position," Krishnan says. The overseer might be called one of several things: chief operating officer, chief process officer--or chief information officer. But if the CIO doesn't step up, he predicts, "the CIO will be subsumed."

THE DEMOCRATIZATION OF TECHNOLOGY

Bruce Rogow, principal of consulting firm Vivaldi Odyssey & Advisory, has been traveling the country for several years interviewing a spreadsheet's worth of CIOs in support of a project he calls his IT Odyssey. Rogow's most recent revelation: an alarming turnover in the CIO positions he's been tracking. "Everything I'm seeing says that we're in a transition period with the CIO," he says.

Some CEOs are beginning to question whether their companies even need a CIO, Rogow says, or at least if they have the right person in the job. That's because more responsibility for technology projects is moving into business units. One indication is that IT vendors increasingly are targeting business unit managers, pitching their products "to the people who use the technology," Rogow says, paraphrasing the vendors, "not to the fool who's keeping them from using it."

End-user-driven technologies such as software as a service, social networking, mashups, and wikis are contributing to what the University of Michigan's Krishnan calls "the democratization of technology," shifting IT responsibilities to business units and pressuring the CIO position to change. Rogow hits on an important point: There's a perception that IT departments in general, and CIOs in particular, are at best order takers and at worst control freaks.

In a survey conducted last month by InformationWeek Research of more 724 business executives--CIOs, CXOs, and line-of-business managers included--43% say that business managers are taking on more responsibility for IT projects; only 11% say they're taking on less.

That's a trend CIOs must be keenly aware of, says Forrester's Cameron. But of those who are, too few take it seriously. He offers the example of a $2 billion-a-year consumer services company in Canada he visited recently. The marketing department had signed up for a Web-based subscription software service, and Cameron summarized the CIO's reaction this way: "They're going to fail. They'll come running back." From another perspective, Aneel Bhusri, president of software-as-a-service startup Workday, says he targets mostly departmental executives but is ever-mindful of CIOs mostly because of the "veto power" they wield--hardly a strategic influence.

The irony is that for years, IT managers have been trying to get business decision-makers more engaged in technology. Now that it's happening, many want to shut it down. "But it's too late," Cameron says.

Mike Cuddy, CIO of Toromont Industries, a Toronto-based distributor of construction equipment, says the biggest change he's seeing from the business executive ranks is "a much greater sensitivity to the potential for the applicability of technology to business."

So what's bad about that? Here's what: Savvy business execs increasingly are aware of new technology trends and eager to have their companies embrace them. If there isn't a focal point for that change--i.e., the CIO--change will happen ad hoc: marketing guys looking at marketing solutions, finance guys looking at finance solutions. All those disparate systems will generate important corporate data that's spread across various business units. The net result: "You get a bit of a dog's breakfast," Cuddy says. In other words, an integration nightmare.

Those integration efforts generate higher infrastructure costs, which sounds all too familiar to senior execs who by now are well aware that "technology decisions made in a vacuum or a silo ultimately drive up costs," Cuddy says. Therefore, it's incumbent on the CIO to lead process changes through IT initiatives across the enterprise, rather than following the lead of departmental executives. Otherwise, the CIO role will be relegated to that of an infrastructure manager, responsible mostly for cleaning up the integration mess. Cuddy says he's seen CIOs replaced because "the perception was that the CIO was just a technology manager."

WHAT'S CHANGED?

John Zarb, a long-time technology manager, now an independent consultant, is unfazed by predictions of the CIO's demise. "When are we going to accept the fact that the CIO is vital, needed, and here to stay?" he says.

Churn in the CIO ranks isn't new and it doesn't necessarily mean the position is in danger of extinction, at least not any time soon. Umesh Ramakrishnan, vice chairman of executive search firm CT Partners, says his company is conducting more CIO searches this year than last, with eight to 12 going on at any given time. Also, the number of companies wanting the CIO to report to the CEO has increased in that time, he says, and current searches indicate an almost even split between the CIO reporting to the CEO and the CFO. That data point in the SIM survey may turn out to be a blip after all.

CIOs seem to be gaining respect, at least at some organizations. In the InformationWeek Research survey of C-level executives, 41% say the influence of the CIO at their company is on the rise, while 40% say there's no appreciable change, and 19% say that influence is declining.

So what's changed in terms of what companies are looking for in a CIO? "We're seeing a lot more business leaders being brought in to fill the CIO role," Ramakrishnan says. Those with proven records of solving business problems and increasing revenue streams are the ones most in demand; those who come in with a new set of toys ... not so much. "There's a bias against those who have implemented the latest technology but not solved any business problems," he says.

Tim Stanley, the hard-charging CIO of Harrah's Entertainment, the hotel and casino company, is a good example of the evolved CIO. Besides holding the title of CIO, Stanley is senior VP of innovation, gaming, and technology. In that role, according to his lengthy corporate profile, he's responsible for "the strategy, architecture, program management, development, support, and operations of the entire portfolio of Harrah's gaming and IT-enabled business capabilities in the U.S. and abroad, as well as the identification and enablement of new business & IT innovation within the company." Back to Krishnan's thesis: Business process ownership and oversight go hand in hand with Stanley's many technical responsibilities.

CIOs who want to step up must refocus the culture of IT, become more of a technology venture capitalist, says Dave Aron, a VP of research at Gartner. As such, they must challenge the value of projects, suggest alternatives, and make sure the proper procedures are in place, both inside and outside the IT department, to ensure success. CIOs must "exercise influence rather than just control," Aron says.

For Ken Harris, senior VP and CIO of Shaklee Corp., it helps that he works in a midsize company, and it isn't just the big-fish, small-pond factor. Harris, the former CIO of Gap and before that Nike, came to Shaklee two years ago, after the company was acquired by a private equity firm, to determine the role IT would play in helping the company "become relevant again to a younger generation" and figure out how to get "the biggest bang for the buck."

What's different about this current position, Harris says, is that it's much more about strategy than tactics. "I can help them make decisions that are doable from a technology standpoint," he says.

Harris is a believer in software as a service, not only for the low up-front costs but also for the rapid deployment capabilities, having implemented several SaaS projects at Shaklee in the last two years, such as RightNow's CRM service, Web analytics from Visual Sciences, and address verification with the help of data services company StrikeIron, which customer service reps had been clamoring for. "On the business side, users are demanding so much more, more quickly," he says.

One of the virtues of Web 2.0 technologies, according to Rod Smith, VP of emerging Internet technologies at IBM, is being able to act quickly on emerging business opportunities. Chief among them are partnerships, but partnerships create integration work, and the time frame for that work is collapsing rapidly, Smith told a group of financial services technology managers at a recent conference. Customers tell him that in the current business environment, 20% of relationships last less than six months, and that "drives IT crazy, because it takes IT six months to get started on a project," Smith said.

Those dynamics--speed, change, partnerships, business process transformation--will only accelerate in the coming years. "The next decade will not be about control. It will be about innovation without permission," says Jeremy Burton, CEO of Serena Software, a vendor of software-configuration and mashup technology. "Guys who made a reputation with control will struggle."

Or maybe they'll just stay where they are, consolidating data centers, maintaining applications, and managing server boxes, instead of leading business-process change through technology innovation. That change agent is a role that will surely be filled by someone. But if not by the CIO, then by whom?

Write to John Soat at jsoat@cmp.com.

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