>Nimbleness, Ingenuity and The Total CIO

>We all know the story of David and Goliath, where little David slays the monstrous adversary from the Philistines, Goliath.

From a religious perspective, of course, David is victorious over this incredible enemy, by the hand of G-d; it is a miracle!

Metaphorically, David slays the Giant with a rock and sling shot overcoming the daunting Goliath and his foreboding weapons (sword, spear, shield, and armor); it is David’s nimbleness and ingenuity that overcome the hulking and conventional giant, Goliath.

You have to love this story.

Good wins over evil. The smaller defeat the larger. The underdog overcomes the “sure thing.”

The modern day, Hollywood version of this is Rocky whose sheer determination and laser focus prevails against superior adversaries. How many times does the smaller Rocky defeat the larger, better trained, more muscular opponents? Remember—Apollo Creed (taller, trimmer, faster), Hulk Hogan (the giant who literally picks Rocky up over his head), Clubber Lang (the awesome Mr. T), Ivan Drago (the steroidal, methodically-trained Soviet), and so on.

David versus Goliath, Rocky versus Ivan Drago…

While these are amazing and inspiring stories of success, these aren’t unique stories or themes in history. Why?

As the old saying goes, “the bigger they are, the harder they fall.” Small, nimble, and innovative can and will overcome large, lumbering giants. This can be in the ring (like Rocky), on the battlefield (like David and Goliath), and in marketplace competition (like challenger brands such as Apple, Google, Honda…).

Recently, the Wall Street Journal has an article entitled “Honda’s Flexible Plants Provide Edge.” (23 September 2008)

“One recent morning, the Hondo Motor Co. plant here churned out 120 Civic compacts. Then the production line came to a halt and workers in white uniforms swept in to install new hand-like parts on the giant gray robots that weld steel into the car’s frames. About five minutes later, the line roared back to life, and the robots began zapping together a longer, taller vehicle, the CR-V cross-over. In the automotive world, this is considered quite a feat.”

Honda’s plants are the most nimble in the industry.

In the first 2/3 of the year, while sales are down 24% at Chrysler, 18% at CM, 15% at Ford, and even 7.8% at Toyota, Honda is up 1.7%!

Like with Honda’s more efficient production process—“to shuffle production among different plants as well as make different models in one plant–flexibility and innovation are the rocks and slingshot of the modern day David. Watch out Goliaths!

The great lesson here for large, successful organizations is that no matter how much bigger and better you are than the competition, you can never rest on your laurels.

Time can change everything.

The smaller, seemingly disadvantaged enterprise is eyeing those in the #1 spot and taking it as their personal challenge to unseat them. They are clawing their way up and will use their smaller size to outmaneuver, and their ability to innovate to leap ahead of the competition.

The Total CIO (like King David and Rocky) find a strategic advantage to enable them to overcome stronger and/or larger competitors. The Total CIO leverages technology/business process improvement as tools of innovation to change the game completely.

>Honda and Enterprise Architecture

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Enterprise architecture helps to define, structure, and govern the business processes and enabling technologies of the organization. It packages this into an identification of the as-is, to-be, and transition strategy. EA is a methodology for planning and governing.

Some companies though, such as Honda, function more by a seat-of-the-pants approach than by EA.

Fortune Magazine, 17 March 2008, reports that “the automaker’s habit of poking into odd technical corners sets it apart—and gives it a big edge on the competition.”

Honda is a huge, highly successful company. “Since 202 its revenues have grown nearly 40% to $94.8 billion. Its operating profits with margins ranging from 7.3% to 9.1% are among the best in the industry. Propelled by such perennial bestsellers as the Accord, the Civic, and the CR-V crossover, and spiced with new models like the fuel-sipping Fit, Honda’s U.S. market share has risen from 6.7% in 2000 to 9.6% in 2007.”

What is Honda’s secret to success?

The wellspring of Honda’s creative juices is Honda R&D, a wholly owned subsidiary of Honda Motor.”

“Honda R&D is almost the antithesis of EA’s planning and governance.”

Honda R&D “lets its engineers, well dabble,” so much so that even the president and CEO of Honda says “I’m not in a position to give direct orders to the engineers in R&D.” Honda gives a lot of latitude to its engineers to “interpret its corporate mission” to the extent that their engineers have been known “to study the movement of cockroaches and bumblebees to better understand mobility.” R&D pretty much has free rein to tinker and figure out how things work, and any application to business problems is almost an afterthought.

This “more entrepreneurial, even quirky” culture has helped Honda find innovative solutions like fuel cells for cars that are “literally years ahead of the competition”. Or developing a new plane design “with engines mounted above the wings; this has made for a roomier cabin and greater fuel efficiency.”

At the same time, not having a more structured EA governance approach has hurt Honda. “When Honda launched the hybrid Insight in 1999 for example, it beat all manufacturers to the U.S. market (the Toyota Prius came six months later). But while the Prius looked like a conventional car, the Insight resembled a science project; it didn’t even have a back seat. Honda halted production in September 2006 after sales dropped to embarrassing levels. Toyota sold more than 180,000 Priuses last year.”

Honda is learning its lesson about the importance of planning and good governance, and now, they “tie [R&D] more closely to specific business functions” and “as a project approaches the market, the company is asserting more supervision.”

R&D and innovation is critical, especially in a highly technical environment, to a company’s success; however even R&D must be tempered with sound enterprise architecture, so that business is driving technology and innovation, rather than completely doing technology for technology’s sake.