Visionary's playbook

Keith Krach has high expectations for the Internet economy.

“This is the second Industrial Revolution,” said the CEO and chairman of the board of Ariba, to members of the World Trade Center of Cleveland at the annual conference in May. “It’s not only a technology shift, it’s also a business model shift and a cultural shift.”

The revamping of the conventional business model is readily evident. Through the Internet, companies can access global economies of scale, develop process efficiencies and do business at a real-time pace. It’s truly a win-win situation for everyone involved, Krach says.

But you’d better do it fast.

“It’s not the big that’s going to eat the small,” he says, “it’s the fast that’s going to eat the slow. It’s all about speed.”

This change in business models has led to another shift that should not be ignored — the cultural shift.

That shift can be seen in a variety of ways. Long-held notions of hierarchical structures are quickly being reshaped into structures of employee empowerment. Equity of the few is transforming into equity of the many. Business students today leave school with a diploma in one hand and a business plan in the other. They’re ready to start the next dot-com and aren’t afraid to let everybody know it.

Krach should know. The Rocky River native co-founded Ariba in 1996 and the company now boasts a market capitalization in excess of $16 billion. Ariba provides business-to-business solutions for more than one-fifth of the Fortune 100 companies. It develops comprehensive and open commerce platforms to build B2B marketplaces, manage corporate purchasing and electronically enable suppliers and commerce service providers on the Internet.

Ariba is perfectly positioned to view and take advantage of the changes brought on by the new economy. In an effort to capitalize on the cultural shift, Krach and his management team created a playbook for the future of the company.

Here is a glimpse inside its pages.

Vision and mission

Simply put, where is your company going and how are you going to get there?

At Ariba, the vision is to lead the electronic trade revolution, to build a great, sustaining organization into the next century. The company’s mission is to be the business-to-business platform leader and bring value to existing customers.

Woven through the fabric of the company, Krach says, are a few ideals that represent the company’s approach to business:

Respect — Like the United Nations, Ariba understands, accepts and even exalts the differences in talents and convictions of its employees.

Integrity — From employees to corporate partners and customers, a company needs to be wary of how it deals with ethical issues.

Ambition — Otherwise known as B.A.G., every company should set big, audacious goals.

Courage — Give everyone the opportunity to experiment and “don’t cut their heads off for mistakes.” The atmosphere should include an element of “scary fun,” as Krach’s son put it after his first ride on a roller coaster.

Define limits

Along with those ideas come a few rules. Ariba’s rules were written with one goal in mind — to make the company better.

1. There must be direct and open communication. “You want to hear the good, the bad and the ugly,” Krach says. “If you’re short on time, focus on the bad and the ugly.”

2. No idea is a bad idea, unless it’s the CEO’s. This attitude creates a safe environment for employees to speak their minds, he says.

3. Always increase the standards of performance.

4. The team comes first and the functional specialist second.

5. Hire the best people, especially if they’re better than us. “I believe with every fiber of my body, the company with the best people wins,” Krach says.

And Krach truly believes in the win-win ideal. He claims this second industrial revolution will create unprecedented value and raise the standard of living around the world.
Only time will prove whether he’s right or wrong.

How to reach: Ariba,

Daniel G. Jacobs ([email protected]) is senior editor of SBN.