Title: Director, e-business speed, Johnson Controls Inc.
Favorite Web sites: webi.wharton.upenn.edu (site of the Wharton School at the University of Pennsylvania), nofear.com, pickuptruck.com
E-biz philosophy:Products and services exist to expand choice. Brands exist to simplify choice. The competition is no longer just between products and services. It’s between business models and value chains.
Next big thing: Value chain collaboration, and to paraphrase my favorite philosopher, Yogi Berra: ‘If you don’t want to collaborate, no one will stop you.’
The 46-year-old director of e-business speed at Johnson Controls Inc., often quotes Herb Fishel, executive director of GM Racing: “The process is worth at least 20 additional horsepower in an industry that struggles to find a quarter horsepower or a 10-rpm advantage wherever it can.”
Waraniak’s heroes are a who’s who among automotive execs, racers, athletes and entrepreneurs. They include Rick Hendrick, Chevrolet race team sponsor and Hendrick Automotive Group founder; Jim Perkins, former Chevrolet general manager; Earl Werner, chief engineer with Harley-Davidson Motor Co.; and racers Rick Johnson and Tommy Kendall. All are known as risk takers and innovators, and they exhibit a “no-fear” philosophy that Waraniak has engineered into his own persona during a heady 23-year career .
At the top or outWaraniak believes true innovators are rare breeds. “They’re No. 1 or No. 2 in any market they’re in, or they get out,” he says. “There are a lot of people trained to take things apart but not in how to put them back together for more synergy.”
In June 2000, Mike Suman, group vice president of collaborative commerce, marketing and communications at Automotive Systems Group in Plymouth, Mich., hired Waraniak to quicken Johnson Controls’ e-commerce transformation to the Internet. Suman needed a go-to person to lead the charge for hatching e-business practices and building collaborative networks begun several years ago.
Even though the automotive group contributes 74 percent of revenues to $17.2 billion parent Johnson Controls in Milwaukee, executives were under the gun to trim costs and increase profits.
“For Johnson Controls, it’s about new ways to create interfaces for our automotive customers. I have to accelerate and drive the computer, the network incubator that does all that,” Waraniak says. “The whole thing is about combining scale, scope and entrepreneurial drive” for increased profitability.
Most of Waraniak’s time is spent collaborating with suppliers and partners to quickly move processes such as product development and CAD/CAM engineering into the Internet. To shave costs, he is introducing concepts such as virtual meetings and Webcasts so most work can be done online, and suppliers and customers have access to the latest product changes.
Waraniak estimates that by sharing Net-enabled core processes, Johnson Controls can save a customer up to 50 percent of target costs, roughly $20 million on a new seat system, for example.
Once-manual functions such as purchasing, accounting, product design and assembly are going online. In the hurry-up climate, he works with high-tech providers such as MatrixOne (matrixone.com), the automotive group’s technology partner in Westford, Mass.
To streamline product launches, the group uses sophisticated product data management software applications, called PDM, from MatrixOne.
In the last two years, Johnson Controls has invested millions of dollars into e-commerce and collaboration. Insiders decline to give even ballpark figures, saying they’re impossible to calculate because all aspects of the company are tied into the transformation.
Similar to eGm, General Motors’ electronic think tank, “e-business at Johnson Controls is becoming the business, so it’s the budget for everything,” Waraniak says.
The ‘No Fear machine’Before Johnson Controls, Waraniak held a string of one- to two-year consulting or employee positions with EDS/A.T. Kearney Management in Southfield, Mich.; Oracle Corp. in Troy, Mich.; and Benchmarking Partners in Cambridge, Mass.
From 1993 to 1995 he was COO at No Fear, the edgy sports apparel maker and marketer in Carlsbad, Calif. He helped the company’s founders, brothers Brian and Mark Simo, fatten the bottom line.
“The three of us together were a good combination of (building) the company around engineering business processes. We actually called it the No Fear machine,” Waraniak says. “We went from $2 million in revenue to $120 million in three years.”
Waraniak streamlined operations and helped capture the desired Gen Y and X targets by developing partnerships to reduce investments in capital, resources and infrastructure. He pushed “contract manufacturing management,” a cost-cutting business model popularized by companies such as Cisco and Nike.
“We provided the product planning, specifications, marketing and brand management, while other enterprise partners manufactured and retailed the product,” he says.
His speed and tenacity awe many of his fans. Some business partners say he’s a true collaborator, but keeping up with him can be a challenge. Some people question if his restless entrepreneurial style will keep him in one spot long enough to see tangible, long-term results.
“He took racing, business and teamwork and brought them all together. He’s always looking at creative, innovative ways to do business,” says Mike Segal, senior vice president of customer success at MatrixOne.
Perkins brought Waraniak to Chevrolet-GM motorsports as an engineering adviser primarily to motorsports execs, engineers, team owners and members. Perkins, who heads the 59-franchise Hendrick Automotive Group in Charlotte, N.C., wonders if Waraniak has the inclination to stay put.
“JCI is not going to be short of assets to commit themselves (to e-commerce), but the question in my mind is whether John will be willing to commit and not be distracted by the next thing to come his way,” Perkins says.
Time will tell. Waraniak sees himself as an “intrepreneur,” or an internal “cross triathlete,” functioning between engineering, marketing and new business development.
“Pushing the envelope of performance takes risk and courage,” he says. “A no-fear value chain is not about recklessness. It’s about facing the fears and challenges of collaboration and using those fears as a catalyst to energize, not paralyze, the business model for innovation. In today’s environment, the biggest risk is not taking one.”
The GM-Hughes yearsWaraniak’s rapid-fire approach to rejiggering business models was fine-tuned during his GM-Hughes days from 1986 to 1993. As one of the first GM-Hughes transplants from Fullerton, Calif., Hughes sent him to invigorate Chevrolet’s ailing motorsports program.
It was a time of slumping sales and morale. Waraniak taught execs to apply systems-based engineering and program management processes to high-performance racing. Within three years, Chevrolet began winning major national races. The much-relished Triple Crown Championship (NASCAR Winston Cup, IndyCar and TransAM) came in 1991.
In a way, Waraniak has come full circle. By bringing new rules to the new economy at Johnson Controls, he is hoping to prove that his formula for collaboration will result in stronger profits.
Says Waraniak: “You can’t be profitable with the same old way of doing business.”