Is it possible to deliver innovation, transformation, and cultural change in the cutthroat world of disruptive business models?

Colony Brands is in the process of finding out, but it’s much like figuring out how to fire bullets while taking incoming ordinance.

The Monroe-based confectionary and cheese maker is like other established companies in that it has gone through many changes, and beaten back multiple competitive threats since its founding, and it’s trying to figure out the next 20 years. It’s also like other companies in that it operates in an industry, catalog retail, where the inability to adapt to technology-enabled business disruption has caused the demise of iconic brands.

To open the second day of the Fusion CEO-CIO Symposium produced by WTN Media, three of its top executives gave their take on disruptive business models and IT transformation: John Baumann, president and CEO; Don Hughes, vice president and CFO; and Steve Cretney, CIO.

History in the making Founded as the Swiss Colony in 1926, the company began as a college project for a mail order cheese business, and became a national food brand. Today, it features an extensive portfolio of food and non-food brands, including Seventh Avenue, RaceTeamGear.com, and Montgomery Ward.

Staying ahead of the IT transformation game keeps Cretney’s mind occupied late into the night. His challenge is to accommodate technological change in alignment with Colony Brands’ strategic plans and initiatives. With mobile, cloud computing, social media, and analytics literally changing every day, it’s very difficult to stay current, let alone translate change into future business value. 

Working directly with leaders in the business, his IT staff is building a long-term roadmap to guide technology investment decisions and better anticipate future technology innovations. As our customers demand new channels of engagement, he says Swiss Colony’s brands should be in a position to quickly respond and offer its products and services on these channels.

There also some legacy systems to shed, even though they have served the company well, but Cretney believes organizations can be proactive “disrupters,” rather than simply fall prey to disruption, by being strategic yet practical.

That means getting the right things done while moving toward a longer-term strategic target, and translating the opportunities and risks of technology transformations that are underway. One example is using social media as a service channel and possibly a future marketing channel.

Another answer lies in digital business strategy, laying out the future capabilities that will be needed and connecting them in the context of a technology and business strategy. Cretney believes organizations must identify the capabilities of their customer- platform strategy, including a 360-degree view of the customer, plus the functional capabilities required to service needs, and the expanded channels and tools that support order-management processes.

“Doing this allows us to discuss specific actions related to each aspect of the strategy, while connecting all aspects to form a comprehensive and long-term strategy,” he noted. “We’re doing the same with our digital marketing and analytics strategies.”

How is Cretney lighting the innovative match that will be required to fire these improvements? He doesn’t have to look far for projects that need to feel the heat. “I find there are many layers in the organization that need me to sort of light up things,” he said. “At the top of the organization, I’ve engaged them in strategy discussions around a multi-year roadmap, which is predicated on the business strategy.”

“At same time, I’m engaging my team members who have accountability for the legacy environment in assessing our current capabilities versus the business strategy. Through this iterative dialog and planning, we’re finding that not only are people getting comfortable with the needed change, their sense of urgency and drive to move forward is quickly increasing.”

For CFO Don Hughes, it’s no longer acceptable for businesses to live with the traditional model of multi-year, high-risk, and high-cost systems that often are not close to “on time” or “on budget.”

“From a disruptive IT perspective, it is apparent to me that we need to continue to invest in transforming our IT systems and infrastructure to get more flexibility and a quicker delivery of systems that make a real difference to our customer and ultimately to the bottom line of the business,” he stated.

The difficult questions center on the pace of change as the organization moves to new technology platforms, and the level of investment it can handle to make the required transformations. Standing still is not an option because that’s a good way for organizations to get run over by competitors.

Colony Brands knows it’s imperative to become more nimble so it can take advantage of changes in customers behavior, especially because they expect delivery via smartphone, tablet, or something not yet invented. “We need to position ourselves to adapt and change rapidly, which means a deviation from the past delivery of technology,” Hughes noted.

Staying true

The trick is to make the necessary changes while staying true to what the company is all about. CEO John Baumann says Colony Brands would continue to take an exhaustive approach — plan, plan, plan, and measure, measure, measure — with the belief that everything it does must be proven. But in order to better predict future disruptors, and the extent to which they will be disrupters, the company might have to make some adjustments.

With the Internet changing the catalog landscape, and social media radically changing how catalogers deal with customers, smaller Internet competitors come and go. Many of them fail due to unsustainable business models or an inability to consistently fulfill orders, but the 800-pound gorilla, Amazon, has more staying power.

Baumann sums up Amazon up this way: It offers everything, it’s very competitive from a pricing standpoint, and sometimes it gives away shipping costs. It is top-line focused (whereas Colony Brands is bottom-line focused), but its profit margins are razor thin. Still, Amazon is a competitive threat because “they are on a market-share binge.”

Colony Brands’ chief executive takes business disruption seriously because every potential disrupter he was warned about has come to fruition. That’s part of the reason why Colony Brands has to be willing to adjust from “ready, aim, fire” mode, to “ready, fire, aim” mode.

Putting wings on the tortoise, moving faster, and doing more things on faith can be a somewhat scary transition, but Baumann believes a balance can be struck with even better use of analytics and remaining true to what has worked for the organization.

“We’re big on culture and staying close to our customers,” Baumann noted. “While we’re going faster and pushing harder, we have to stay in touch with our customer.”

Contributing writer Joe Vanden Plas is editorial director of In Business magazine in Madison.