For e-exchanges, you gotta have friends

January 1, 2001

BY MICHAEL KRAUSS

Who says packaged goods is behind the technology curve?

Not Betsy Cohen, vice president and corporate futurist at St. Louis-based Ralston Purina Co. Cohen was one of the "Four Amigos," leading packaged goods marketers who banded together to guide the early formation of Transora.com, a business-to-business electronic marketplace for consumer goods manufacturers, suppliers and retailers.

Should Transora succeed—and its prospects are reasonably good—it will be because Cohen and her teammates took the best of the old and the new economies and fused them in record time.

Owned by a consortium of packaged goods companies that includes Procter & Gamble, General Mills, Kellogg, Kraft, Nabisco and Nestle, Transora.com could become one of the world’s premier e-marketplaces. Transora’s purpose is to capitalize on b-to-b electronic commerce to create efficiencies all along the industry’s supply chain.

Transora could do much more than electronically match buyers and sellers to create purchasing and procurement efficiencies. Transora and exchanges like it in other industries could fundamentally reshape their industries.

To me, what’s really interesting about Transora is its genesis. In an industry not known for the nimble and rapid adoption of new technology, Transora’s formation and development is unique. It was launchedmuch like a Silicon Valley start-up. And that’s where Betsy Cohen and the Four Amigos got involved.

"There’s a group of chief e-business officers that meet through the Grocery Manufacturers Association of America," Cohen says. "(In) March, about a week after the auto industry formed a procurement exchange (Covisint), we were in New York hearing presentations on measuring Internet effectiveness."

"It was an epiphany," Cohen recalls. "We said, ‘Why don’t we get our own industry group to start a company? Why don’t we do what the auto industry is doing?’ We ignored the speakers, and a group of us said, ‘What would it take?’ "

That meeting at New York’s Tribeca Grill was where Transora was born. The participants decided to go back to their companies and see if they could get a team together to decide if they could invest and start a dot-com company, she says.

"We put together asmall presentation deck. In the next few days we got to our CEOs. Meanwhile, the GMA people started calling our management, saying, ‘This group is going to need some of your people to work a day or two a week,’ " Cohen reports.

What was remarkable was the reception their companies gave the idea: Budget and professional resources were committed in Internet time. Organizations that would typically study an issue to death by committee moved rapidly, and today, according to published reports, Transora has raised more than $250 million and has more than 50 major corporations as investors.

"Within a few weeks, there were 100 of us in a room. ... Nothing ever happened fast in the consumer package goods industry. Other important initiatives took years for consensus building," says Cohen, who initially led marketing, communications and public relations for the start-up exchange. "The team just decided that if it was going to happen, it was going to happen quickly."

The Four Amigos—including Cohen, Alex Gibbons from Minneapolis-based Pillsbury Co., Rick Herbst of Kellogg Co. in Battle Creek, Mich. and Rich Kauffeld from Campbell Soup Co. in Camden, N.J.—helped orchestrate the assignments of more than 100 people from a cross-section of the packaged goods elite. When they were through, "There was the financial team. There was a governance group. There was a marketing group. There was obviously a very important technical group. We were from different companies but we felt we just had to plunge forward together."

In a matter of a few weeks, a business plan was conceived: "The business plan ... was finished in April, and presented to 22 CEOs of the world’s largest organizations (in) May," she says.

How did Cohen and the others prod what some might call a sleepyindustry into the vanguard of e-business? "We were passionate," she says. "Passion, a mission and people who see a chance to make a difference." That’s what it takes.

Clearly the established industries have learned it’s their time to lead. Maybe this is what the "New Economy" is really all about.

Michael Krauss is a partner with DiamondCluster International in Chicago.
He can be reached at news@ama.org.