CIOs and the ideal management style

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“Great things are not done by impulse, but by a series of small things brought together.”

Vincent van Gogh (1853-1890) Dutch painter

Today’s article is the seventh in a series of articles (1^st Steve Jobs, 2^nd Michael Dell, 3^rd Warren Buffet, 4^th Bill Gates, 5^th Larry Ellison, 6^th Eric Schmidt), analysing current and past leaders to ascertain how Chief Information Officer’s (CIOs) can learn better management by applying the management practices of leadership, practiced by these leaders.

These blogposts have been informational for me and my readers and I have certainly learnt a lot from all the different management styles of these ‘new age’ leaders. It was fascinating to read that while they all had common aspects, they were also very different indeed.

As a result of these blogposts, books that I read, academic and vocational qualifications and my own experience, I decided to outline my thoughts on the qualities that are needed to become a successful CIO.

1. The start of a CIO’s career within a new organisation:

There is a general assumption within IT that a CIO’s career starts once the interview process is over. This is one of the worst assumptions to be made by a prospective CIO. The aspiring CIO needs to understand the prospective organisation that he/she wants to work with and ensure that it is a good fit for his/hers skills and that the ‘culture’ of the organisation supports change and is quite open to ‘challenging the status quo.’ I would suggest that the CIO has done his/her research on the organisation prior to the interview to establish that it is an organisation that they want to work with and assist to achieve the business benefits that the organisation perceives will be achieved once the CIO joins. The CIO MUST ask the right questions at the interview and ensure that there is indeed a ‘strategic fit’ for both the CIO and the employing organisation.

Read the job specification well and look for indicators that may lead to problems or that highlight that ‘strategic fit.’ Try and define (fine tune) the role to establish, for example, How will IT success be defined and measured?

2. The job begins:

As soon as you join/start an organisation as a CIO, make a list of strengths and weaknesses of yourself and your organisation on a piece of paper as that will enable you to plan effectively and to ‘hit’ the problem areas first. Go into the job well prepared, as by that stage, you had ample opportunity to look at the job specification, research the organisation and the interview gave you ‘key’ information to utilise. Start building your credibility by establishing some areas for ‘quick wins’ and be careful to strike a fine balance between ‘moving too fast or slow.’ For example, trying to impress your boss by moving too quickly to make something happen that results in an awkward explanation to him/her has to be avoided at all cost. Take decisive action, as moving slow can also adversely affect your credibility.

3. Communication and establishing relationships:

Listen, learn and communicate. As soon as you are comfortable, conduct a business/IT review. I am not going to give this consideration as a separate bullet point because I believe that it has to be done by establishing relationships. These relationships will be ‘key in analysing the business and IT and will provide the information that the CIO seeks. This communication and relationship building cycle has to take precedent as the CIO casts a wide ‘networking’ net across the organisation. Talk to senior executives’, gatekeepers, junior staff and all the people who use IT to do their everyday jobs. These are the people who will inform you where IT is delivering value, where business fails and how to strike the right balance.

Conduct ‘one to one’ interviews, inform people within your organisation your goals and communicate to your team your leadership style. Be honest and transparent with people as everyone hates the ‘new smart ass guy/gal.’

4. Lead and innovate:

Always follow your instincts and look for ideas to nurture. Encourage innovation and ask your team to set aside at least 10-20% of their time for projects that they want to do (during business hours). Google and 3M have done this very successfully and if they can do it, so can you. Look for opportunities while constantly analysing every aspect of IT and your team, looking for improvements.

Be visionary and ensure that you present a vision to your team that is representative of where the business wants to be or is heading towards. Create a culture of change and nurture the ‘right’ talent within your team and if hiring externally ensure that ‘action oriented employees’ are selected.

Finally, ensure appropriate metrics and scorecards are used to chart your progress (key success factors and key performance indicators) from just ‘keeping the lights on’ to actually ‘driving business transformation.’

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Related Information:

Who is a CIO?

A CIO is a leader who has an excellent overview of IT, business and how people interact with each other. He can then apply that knowledge to understand where a business is going (Business Vision) and ensure that IT systems and procedures are developed to realise that vision and along the way, if he/she can realise financial savings/contribute to the bottom line (actually utilise IT to earn revenue), he/she become indispensable and should head for stardom. For example, Tesco’s Ex IT Director became their CEO – http://www.thisismoney.co.uk/news/article.html?in_article_id=505864&in_page_id=2

Why hire a CIO?

To ensure that the above actually happens and that the IT systems are actually working towards creating value for the business and are delivering the business vision with assistance from the IT systems.

Why a CIO is important in an organisation?

A CIO is important as without a board level director (CIO), IT manager’s cannot represent IT effectively to the business. Read my blogpost: Leveraging IT for Competitive Advantage – Myth or Reality? – http://wp.me/pw27T-4S

Roles and Responsibilities of a CIO

Deliver the business vision
Create the ‘buy in’ from internal and external relationships to deliver that vision
Develop effective and reliable IT systems to deliver that vision
Empower IT teams to make good decisions
Effective and brilliant leadership

Criteria for Becoming a CIO

Leadership skills, inspirational capability, tenacity, ability to make good educated calculations of where both business and IT are heading towards (especially the IT capability, for example, In House systems vs. Cloud), Excellent networker and people person, team player and good communication skills, especially the ability ‘to listen.’

For More Info:

Master of Information Leadership (MIL) for aspiring CIOs delivered by City University, London

First 100 Days as CIO

Top 10 guidance tips for new CIOs and IT leaders

London School of Business puts whole MBA course on Facebook

Related Articles

• Advice for a new CIO (ask.metafilter.com)
• 10 Lessons From Angry Birds That Can Make You a Better CIO (pcworld.com)
• New Book Helps CIOs Build Business Leadership Skills (pr.com)
• Secret CIO: Meet The Manager Who Will Replace Me (informationweek.com)
• Advantages of a Chief Information Officer to a Business (thinkup.waldenu.edu)
• Eric Schmidt (Ex CEO and current Chairman – Google) management style and CIO (mubbisherahmed.wordpress.com)
• Global CIO: Saving Lives And Changing The World Via NPower (informationweek.com)
• The Four Personas of the Next-Generation CIO (blogs.hbr.org)

Larry Ellison’s (CEO Oracle) management style and CIOs

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Updated 12.12.11

“Pick battles big enough to matter, small enough to win.”

Jonathan Kozol (1936 – ) Writer, Educator and Activist

Larry Ellison (1944 – ) Oracle Corporation’s Founder and CEO

Today’s article is the fifth in a series of articles (1^st Steve Jobs, 2^nd Michael Dell, 3^rd Warren Buffet and fourth was Bill Gates), analysing current and past leaders to ascertain how Chief Information Officer’s (CIOs) can learn better management by applying the management practices of leadership, practiced by these leaders.

This article also follows my previous articles on ERP, Enterprise Resource Planning (ERP) – Past, Present, Future and successful implementation, Cloud based ERP. Fact or fiction?, Back to basics Enterprise Resource Planning – Blog version and Back to basics Enterprise Resource Planning – CIO.co.uk version.

Larry Ellison has led Oracle from start-up to ‘software giant’ with a style that many view as narcissist. “According to psychoanalyst Michael Maccoby, author of Narcissistic Leaders: The Incredible Pros, The Inevitable Cons, “What makes Ellison so successful, even though he’s a narcissist visionary and really not very good at working with people, is that he understands himself, and he understands who he needs to work with – Courtesy of Canadian Business.” Larry Ellison is both an innovator and visionary, I believe these traits will be his legacy, “When you innovate, you’ve got to be prepared for everyone telling you you’re nuts.” – Larry Ellison

PS: CIO is a generic term and other analogous titles are Head of IT, IT Director, Director of IT etc.

The Management Style

What can CIOs learn from Larry Ellison’s management style? Let’s investigate while allowing you to decide.  (In no particular order and a few other sources utilised):

1. Follow your instinct and develop a Clear Vision–and Stick to It: – Courtesy of Canadian Business magazine (with a few changes), ‘While Larry Ellison was employed at Ampex, a firm that did contracts for the U.S. government (mid–1970s), he got his first taste of database software while working on a project for the CIA with the code name “Oracle.” Around the same time, he read a paper published by IBM, which outlined a way to make it easier to store and retrieve data — a prototype for the first relational database. “I saw the paper, and thought that, on the basis of this research, we could build a commercial system,” Ellison, who solicited the assistance of fellow programmers Bob Miner and Ed Oates, recalled in a 1995 interview. “If we were clever, we could take IBM’s research … and beat IBM to the marketplace with this technology. Because we thought we could move faster than they could.” He was right. By 1984, the company he founded with Miner and Oates, originally called Software Development Laboratories, was logging nearly $13 million in annual sales. (Miner died in 1994; Oates retired in 1996.)’

Right from the outset, he dreamed of developing Oracle into a viable successful business. For CIOs this is one of the most important traits that MUST be part of the toolbox.

CIOs need to clearly identify to themselves and communicate to the environment that they work in ‘the vision’ that they have set out to achieve. They then need to have the confidence to deliver that vision.

2. ‘Image’ is everything. – According to People Soft Planet, “Ellison has Oracle in his own image. Now in his late 50s, tall and trim, he has kept himself in excellent shape. His hair is still dark, running to reddish; he has brown eyes and a short beard that helps to camouflage his long jaw. Ellison radiates enthusiasm and charm. He’s animated and engaging on stage, at his best in informal Q&A sessions where he can rap with the crowd.”

According to Canadian Business, “A fan of, and expert on, Japanese culture, he sees himself as a samurai warrior. He also likes to quote a saying attributed to Genghis Khan: “It is not sufficient that I succeed. Everyone else must fail.” The incredible success that he has enjoyed is a marvel to anyone familiar with the accepted literature on what it takes to make a great leader, qualities like empathy, mediation skills and humility. By all accounts, he is a bad listener and a big talker, whose brash, take–no–prisoners approach tends to alienate employees and customers alike. Yet, in the past 35 years, the jet–flying, sailboat–racing renegade has built Oracle into one of the most important tech firms on the planet, with annual revenues of $27 billion — about a billion dollars shy of his personal fortune. (All figures are in U.S. dollars.) While many of his contemporaries have moved to arms–length positions or other projects, Ellison remains the driving force behind the computing juggernaut, continuing to fashion it according to his own design. After acquiring more than 65 tech firms in the past five years, the mercurial CEO announced in September that he would be “buying chip companies,” suggesting that Oracle is positioning itself for what Bill Tatham, head of Toronto–based enterprise software firm NexJ Systems, describes as “another level of world domination.”

But while it may be tempting to single out Ellison as the ruthless villain of high technology, “none of these guys are nice,” says Jeffrey Pfeffer, a business professor at Stanford University and author of Power: Why Some People Have It — And Others Don’t. Before his ousting from Apple, Steve Jobs is said to have become increasingly difficult to work with, refusing to acknowledge that sales were tumbling; since his return, he has often been criticized for his obsessive secrecy, and ruling the company with an iron fist. Meanwhile, it was Bill Gates’s attempt to snuff out the competition that led to antitrust allegations — and sent Ellison rooting through Microsoft’s trash. “It’s very unpopular to say in today’s world, where we have these Kumbaya theories of leadership,” says Pfeffer, “but it actually doesn’t work well.” If anything, Ellison is merely the poster boy for what it takes to thrive in an increasingly ruthless environment. His rare combination of hubris and self–awareness enables him to skid recklessly to the edge, stopping just short of the cliff. And his stunning trajectory offers a valuable lesson: in the cutthroat arena of big business, sometimes it pays to be a jerk.”

3. Be ‘shrewd’ and keep the team on its ‘toes.’ – LE “Years ago, I gave a speech that earned me the eternal enmity of the Netscape board. I said that the biggest problem with Netscape was that Microsoft could copy what they had very quickly. It was a clever product, but there was no technical barrier to entry. It’s much harder to copy a database like Oracle. There are millions of lines of code. It’s an incredibly difficult program to duplicate.

But a browser is not a difficult program to duplicate and I said, at the time, that my cat could write the browser. The board members were very offended by all this, but in fact Microsoft later did do exactly what I had predicted.”

4. Succession: LE – Courtesy of CNET magazine (with a few changes)”If Larry was incapacitated, the cult would dissolve,” former executive Marc Benioff says. “It’s unclear if Oracle is a sustainable enterprise without Larry, because his personality is so firmly entrenched.”

This is an area of weakness for the Oracle leader, as he has not planned effectively for a successor. As Larry Ellison approaches retirement, we will all have to witness whether he appoints a successor or leaves succession to the almighty.

5. Competitive advantage: LE – Courtesy of PeopleSoft Planet (with a few changes) “Just because you’re good at R&D doesn’t mean you’ve commercialized R&D. The tragedy of Xerox PARC was that they had brilliant R&D but terrible execution in terms of turning that R&D into really wonderful products. Contrast that to IBM. During its glory days, IBM was fabulous at translating their innovation into products, into market domination.”

CIOs need to ask themselves how they can help the business through leveraging IT to create competitive advantage. I covered this in my post, Leveraging IT for Competitive Advantage – Myth or Reality?

6. Follow your instinct: LE – Courtesy of People Soft Planet magazine “We are the leader in bio-informatics, and a lot of things there are exciting. Sure, Wi-Fi, even 3G, is fairly cool, albeit expensive. But the thing I’m most interested in is software as a service. That idea that every customer who wants to do accounting on computers, or every customer who wants to do inventory, or manufacturing, has to figure out what computer to buy, what operating system to buy, what Cisco router and switch to buy, what database to buy, is just nonsense.

Companies should be experts in their business, and computing should be available on the Net as a service. So more and more, our business is changing from selling our applications to our customers to: We buy the computers, we run the applications, and you use it. We’ll be the experts. And you just pay us a monthly fee. That really is utility computing.”

7. Talent acquisition – Hire ‘Action’ oriented employees: Courtesy of People Soft Planet magazine, “

Geoff Squire, who ran various divisions of Oracle’s world operations from 1984 to 1993, described the manner in which Ellison selected new programmers and salespeople as “clinical,” Squire attributes Oracle’s success largely to the premium he has always placed on choosing the right candidates. “He really did hire very, very good people,” says Squire. Though Squire acknowledges that Ellison could quickly turn on his charges — as he puts it, “He backs people until he doesn’t” — he sees Ellison’s willingness to constantly refresh the talent pool as a strength. “People who do a great job don’t just get to stick around in companies forever,” says Squire, who is currently the non–executive chairman of Kognito, a U.K.–based data management firm. Despite the fact that he was cut loose shortly before the last of his stock options would have vested, Squire harbours no ill will, insisting that the fortune and experience he amassed at Oracle “set me up for life.” Squire’s trajectory is not unique: Oracle is often credited with creating the most millionaires in Silicon Valley; many of those ousted by Ellison went on to head tech firms that competed in the same high–profile realm. (Incidentally, in the midst of the Hurd debacle, Lane was named non–executive chairman of HP.) “

A CIO needs to trust their gut instinct, as one can only learn a certain amount in an interview. I think, the strategic fit, is a very good measure. How will a new hire fit into the culture of the company? Will they enjoy it here? Have they worked in a similar culture before? The danger is that the culture could be so alien to the new hire, that they find it difficult to adjust.

Larry Ellison has always hired the smartest people who can ‘get the job done.’ Hire your friends and past colleagues, as they will have loyalty to you and as you know them personally, an informed decision can be made on whether they have what it takes to realise your ‘vision.’

8. Spotting opportunities and innovation: LE – Courtesy of PeopleSoft Planet (with a few changes) “When you’re the first person whose beliefs are different from what everyone else believes, you’re basically saying, “I’m right, and everyone else is wrong.” That’s a very unpleasant position to be in. It’s at once exhilarating and at the same time an invitation to be attacked.

There are really four phases. In phase one, everyone tells you you’re crazy and it’s the stupidest thing they ever heard. In phase two, they say, “There is some merit to the argument. It’s still crazy, but there’s some merit to it.” Phase three is, “Well, we’ve done it better than they have.” And phase four is, “What are you talking about? It was our idea in the first place.”

It’s fascinating as we continue to innovate and lead the way in both the application space and the database space. In the very beginning, people said you couldn’t make relational databases fast enough to be commercially viable. I thought we could, and we were the first to do it. But we took tremendous abuse until IBM said, “Oh yeah, this stuff is good.”

We were the first company that said all the applications had to be on the internet and not client/server. Everyone said that was a bad idea. That was 1995. Now everyone has moved all their applications to the internet.

And now we’re saying you have to have a suite—that this best-of-breed approach is crazy. You can’t sell parts that were never designed to fit together. They’re still saying we’re crazy about that. But it’s interesting, SAP and PeopleSoft are now advertising they have suites. Everyone has started using the “suite” word.

And so the four phases repeat over and over again. As long as we continue to innovate, I don’t think that’s going to change. When you innovate, you’ve got to be prepared for everyone telling you you’re nuts.”

The lesson that can be learnt is that within IT we need to spot opportunities for improvement. It is not enough, however, just to spot them, the onus is to spot them and then to create an environment to leverage that opportunity and to make it happen.

For More Info:

Oracle – Larry Ellison Interviews by PeopleSoft Planet

Can Oracle survive Larry Ellison

Larry Ellison – The Source of Oracle’s Wisdom

Larry Ellison’s one man show

What Larry Ellison said about Cisco and Corporate Culture<

CIO 20/20 Honorees–Innovator’s Profile: Lawrence J. Ellison of Oracle Corp.

Top CEO: Larry Ellison / Convinced that the future in high tech depends on consolidation, Oracle’s founder refused to give up on a PeopleSoft takeover, no matter what the obstacles

About.com –Larry Ellison

Hackers take up Larry Ellison’s challenge

Larry Ellison Slams HP Board: “Worst Personnel Decision Since The Idiots On The Apple Board Fired Steve Jobs Many Years Ago”

Related Articles

• Larry Ellison’s Victory (blogs.forbes.com)
• Oracle Wins $1.3 Billion Verdict Against SAP (webguild.org)
• Global CIO: Will Larry Ellison Launch Bidding War With IBM For Netezza? (informationweek.com)
• SAP Fined £821m For Stealing Rival’s Software (news.sky.com)
• Oracle-SAP trial goes to jury with billions at stake (reuters.com)

21 steps to conquer your market(s)

“Getting there first is not what it’s all about. What matters always is execution. Always.”

Facebook’s head of product, Chris Cox

There have been a lot of articles written in the past on the merits of being the second mover into an area of business , proceeding to become the market leader. Recently, the best product to succeed has been the iPhone.

I wanted to go behind the scenes and contribute by adding the fact that businesses do indeed succeed by being the second or third mover but success happens due to many factors. All of these factors or some of the ones that I will discuss amalgamate to create the success or competitive advantage/tipping point.

I have created a ‘second mover toolset’ for CEOs and senior management (In no particular order) that helps to create a synergy between business strategy, culture and employees (people).

1. Business/IT Strategy: Steve Jobs - SJ – “We do no market research. We don’t hire consultants.”

Sometimes it’s best to follow your instincts and to believe in yourself to do the right thing. Paralysis by analysis is often the cause that many organisations cannot do well. It’s as Nike says, Just do it!

2. SWOT analysis: As soon as you join/start a company as a CEO, make a list of strengths and weaknesses of yourself and your company on a piece of paper. Don’t hesitate in throwing bad apples out of the company.

3. Spotting opportunities: SJ – “We all had cellphones. We just hated them, they were so awful to use.”

The lesson that can be learnt is that CEOs need to spot opportunities for improvement. It is not enough, however, just to spot them, the onus is to spot them and then to create an environment to leverage that opportunity and to make it happen.

4. Focus: SJ – “People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully.”

A CEO needs to focus on the most important issues that are relevant to the business and to shy away from the issues/projects that do not add value to the business but may just be a ‘nice have’ or appear to add value. Learn to say, ‘No’.

5. Know your business and innovate: SJ – “I put out an agenda — 80% is the same as it was the last week, and we just walk down it every single week.”

The CEO and the entire business need to know how the business operates, preferably, as intricately as possible. It is that complete overview that will allow innovative opportunities to present themselves.

6. Handling barriers and roadblocks: SJ – “And we pushed the reset button. We went through all of the zillions of models we’d made and ideas we’d had. And we ended up creating what you see here as the iPhone, which is dramatically better.”

7. Customer conversion: SJ – “But if we put our store in a mall or on a street that they’re walking by, and we reduce that risk from a 20-minute drive to 20 footsteps, then they’re more likely to go in because there’s really no risk.”

CEOs need to help the business by helping to identify opportunities in attracting additional customers. They need to ask themselves, “How can we assist in taking the business to the consumer”?

8. When the going gets tough, investment in people always pays: SJ- “What I told our company was that we were just going to invest our way through the downturn, that we weren’t going to lay off people, that we’d taken a tremendous amount of effort to get them into Apple in the first place — the last thing we were going to do is lay them off.”

I covered this, under mobility of management when I covered; can IT Management failure be caused by a deadly disease? Part II. CEOs need to understand the importance of retaining and investing in people as one of the business’s most important assets is yet again confirmed by another business leader. This means that they need to stand by that conviction and avoid losing people in economic downturns.

9. Successful innovation and success in general may be built on failure: SJ -. “Will this resonate and be something that you just can’t live without and love? We’ll see. I think it’s got a shot.”

Apple has proved that failure can lead to success and continues to innovate by investing in many technologies. Some will inevitably fail while others such as the iPod and iPhone will be huge successes. Many businesses lack of innovation is due to their fear of failures.

10. Family commitment: Michael Dell – MD “I think we make a priority to bring balance into our lives. To me, family is very important. So if you look at my schedule, one of the things I realized a long time ago is that there is a limit to how much productive work you can actually do in a given week. There’s also the happiness factor; if you want to do something for a long time and be really good at it, you’d better have a strategy that is sustainable and works within what’s going on in the rest of your life. For me that means that I’ve got to have time with my family; I’ve got to have time to exercise; I’ve got to have time to sleep; I’ve got to be able to take my kids to school.”

This is an aspect of life that I firmly believe in as well. Time cannot be turned around or replaced. It is very important that we spend time with spouses and spend time with our children. As they grow up we have to ensure that they become responsible and active citizens. A work/life balance is crucial and ensures that we work optimally.

11. Learning: MD – “Continuous learning is also important.”

All great leaders have made it a habit to constantly learn. MD visits the companies that impress him by paying them a visit to learn how to improve himself and Dell. Other leaders such as Bill Gates are very well read and read books to improve their knowledge. The knowledge of all great minds, past and current, is available. It is upon us to seek that knowledge.

12. Risk assessment and crisis management: Warren Buffet – WB ‘If there is any significant bad news, let me know early’. The team need to have confidence in the CEO, in order that ‘bad news’ events/issues/problems can be resolved prior to them mothballing to the ‘point of no return.’ ‘An investor needs to do very few things right as long as he or she avoids big mistakes.’

13. Business reputation: WB - ‘Look at the business you run as if it were the only asset of your family, one that must be operated for the next 50 years and can never be sold’. He adds that ‘We can afford to lose money – even a lot of money. We cannot afford to lose reputation – even a shred of reputation.’ CEOs need to understand that as witnessed by the recent BP oil spill crisis. It had a devastating effect on BP’s reputation, wiped millions off its share price, cost billions to settle claims and control the oil spill. Additionally, the irrecoverable loss of both human and marine life, coupled with the environmental damage leaves the oil giant in shambles.

14. Quality management: ”What I must understand is why someone will continue to get out of bed in the morning once they have all the money they could want,” Buffett says. ”Do they love the business, or do they love the money?” CEOs need to have a team that enjoys working within the associated line of business.

15. Trustworthiness and integrity: Developing characteristics such as trustworthiness and integrity, Buffett believes, is a matter of forming the right habits. “The chains of habit are too light to be noticed until they are too heavy to be broken,” he says. People who stray from these values often show up on Wall Street; they may initially even shine; but eventually they self-destruct. “That is sad, because it does not need to happen,” says Buffett. “You need integrity, intelligence and energy to succeed. Integrity is totally a matter of choice — and it is habit-forming.”

16. Develop a Clear Vision–and Stick to It. – From the beginning, Bill Gates dreamed of developing Microsoft into a corporate giant. For CEOs this is one of the most important traits that MUST be part of the toolbox.

CEOs need to clearly identify to themselves and communicate to the environment that they work in ‘the vision’ that they have set out to achieve. They then need to have the confidence to deliver that vision.

17. Hire ‘Action’ oriented employees. – CEOs usually have exposure to many different environments and come across many employees. Some will be better than others, while some will be outstanding. Gates has always hired the smartest people who can ‘get the job done.’

18. ‘Stop’ the ‘mad bureaucracy’ - I have mentioned this before in a post (can’t think of which one though) and it gets reiterated by Microsoft. As Matt said, ‘The plague of most big companies is bureaucracy and stupid rules. Thielen gives the example of an un-named high-tech company that sent a four-page memo to all of its employees on proper security badge procedure, including infinitesimal details on how and where to wear the badge.

To that, Thielen states, “Does Microsoft manage to avoid this type of inane garbage? By and large, yes.” Unlike most companies, Microsoft actually assumes its employees are smart. Rules at Microsoft are few and far between, and the ones that exist tend to make sense. Having only a few important, logical rules means that employees actually remember and follow them.

19. Annual rating of performance

This is an area of Dr Deming’s theories that I do not have to adjust for CEOs. The annual rating of performance is an arbitrary and unjust system that demoralises employees and nourishes short term performance. It has an added side effect as it annihilates team work and encourages fear.

This annual rating of salaried people is also called the Merit system, annual appraisal and management by objective – management by fear is a better term. This system works by rewarding employees for what they have done in the past year, i.e. performance pay. The effect is devastating as the employee must have something to show and this in turn nourishes short term performance and annihilates long term planning and team work. As each employee is encouraged, to show and prove their individual contribution to qualify for the performance pay, it stifles team working. Even if individuals are working productively as a team, inadvertently, they are identifying ways in which to use the team work to justify that all important, performance pay!

Dr Deming’s theory encourages teamwork in its true sense. Actively listen to other team members’ views and ideas and counter members’ weaknesses while using the strengths of the team. This is impossible under a merit rating.

Even more damaging is the fact that when ratings are given out they cannot be understand well enough by employees and as to why they were not rated high enough.

It would be better if this system was a lottery where at least there is a good reason not to understand better, as employees would not feel superior or inferior.

20. Mobility of management

The annual rating of performance encourages mobility of management. As employees are not getting a raise, they are not loyal anymore. This has a devastating effect on the business as people have no roots in the company and are not there long enough to understand the business well enough. Management requires good knowledge of the company, its problems, production and service capabilities and that takes a long time.

For example, if a project manager has just arrived at the business and does not understand its culture, overview of its IT systems, IT and business strategy and is made to work on an individual project, how can he/she understand the overall  impact of what it is they are delivering?

21. Use of visible figures only

Most businesses will use figures that are known, for example, service desk figures. This is because most business schools and graduate degrees encourage us to use these figures. The power is in knowing known, unknown and the unknowable.

Now, the question some of you may ask is that, if it is unknown, how could it be important? Well, we need to understand the multiplying effect of a happy customer and also the unhappy one. Understanding these figures is absolutely crucial for all departments, as just with the given example, if we can understand the multiplying effect, we can harness the effect and turn the unhappy customers into ambassadors within the business.

Related Articles

• The Epic Fail … first post on Startup-Russia.com (startup-russia.com)
• Silicon Alley Insider: The Right Way To Lay People Off (businessinsider.com)

Bill Gates (Chairman Microsoft) management style and CIOs

Image by niallkennedy via Flickr

“There is no security in this life. There is only opportunity.”

Douglas MacArthur(1880 -1964) American General

Bill Gates (1955 – ) Microsoft Chairman and philanthropist

Today’s article is the fourth in a series of articles (1^st – Steve Jobs, 2^nd Michael Dell, and 3^rd was written on  Warren Buffet, analysing current and past leaders to ascertain how Chief Information Officer’s (CIOs) can learn better management by applying the management practices of leadership, practiced by these leaders.

Gates has led Microsoft from start-up to‘software giant’ with quite an unorthodox style of management. On Microsoft’s website, he measures Microsoft’s success as, “We’ve really achieved the ideal of what I wanted Microsoft to become.”

PS: CIO is a generic term and other analogous titles are Head of IT, IT Director, Director of IT etc.

The Management Style

What can CIOs learn from Gate’s management style? Let’s investigate while allowing you to decide.  (In no particular order and a few other sources utilised):

1. Create and nurture ‘the correct culture.’ – ‘John Battelle co-founded Wired Magazine. He says Microsoft was the pioneer of the new-agey workplace, making work as comfortable, inspiring and fun as possible so workers would spend lots of time there.

John Battelle: And as a matter of fact, at Wired we adopted that stuff. We had a chef and a masseuse, all sorts of services, because we wanted our employees to stick around. I believe Microsoft gets a lot of credit for that.

Bill Gates didn’t even finish college, but the office culture he created at Microsoft is now being taught at the country’s top business schools.’ – Courtesy of Marketplace

2. Develop a Clear Vision–and Stick to It. – From the beginning, he dreamed of developing Microsoft into a corporate giant. For CIOs this is one of the most important traits that MUST be part of the toolbox.

CIOs need to clearly identify to themselves and communicate to the environment that they work in ‘the vision’ that they have set out to achieve. They then need to have the confidence to deliver that vision.

3. Hire ‘Action’ oriented employees. – CIOs usually have exposure to many different environments and come across many employees. Some will be better than others, while some will be outstanding. Gates has always hired the smartest people who can ‘get the job done.’

Hire your friends and past colleagues, as they will have loyalty to you and you personally know whether they have what it takes to realise your ‘vision.’

4. Relax and feel at home - According to Matt Richey, ‘Microsoft has a simple way of maximizing its employees’ productivity: It allows each individual’s office to be as individualized as one desires.

That means making the office more like home. Everything from real offices (not cubicles) to windows in most offices, from free soft drinks to no dress code, from an open supply room to anything-goes work hours. Quite simply, these policies improve employee morale, and thus increase overall productivity.’

5. ‘Image’ is everything. – Gates has successfully changed his image over the years from a geek to corporate leader and philanthropist.

CIOs need to change their image from just being technology leader to leaders who understand business and can apply their strategic IT and business skills to the wider business.

6. Successful innovation and success in general may be built on failure: Yep, Gate’s has constantly had Microsoft innovating along. Currently though, as many large IT businesses employ smarter and smarter employees, time will judge who can innovate the most and bring to market technologies that have ‘stickiness.’

The question these companies have to ask themselves is that can employing ‘smarter’ employees stop the next Google , or Microsoft from raising its head?

For those who have been following my blog, I mentioned this ‘war’ state in Google Apps – The myth, hype and reality , Weather bulletin – Google Cloud and icy Microsoft downpour & Search wars – Past, Present and future – Bing, Google or new entrant?

Microsoft has proved that failure can lead to success and continues to innovate by investing in many technologies. Some will inevitably fail while others maybe huge successes. Many businesses lack of innovation is due to their fear of failures.

7. Be ‘shrewd’ and keep the team on its ‘toes.’ – Gate’s, is known for his sharp cross examination of employees who present new ideas, innovations etc.

He analyses information quite quickly and gets to the bottom of the matter at a rapid pace. Employees have criticised this approach and associated quick, sharp, snappy analysis that at times is uncomfortable (in employee’s views). These qualities of Gate’s have enabled Microsoft to dominate personal computers (PCs). CIOs need to understand employee perspectives and ‘effectively quiz’ their teams on solutions being proposed.

8. Ruthlessly protect your ‘budget.’ – According to Matt Richey, ‘Even with its billions upon billions in cash, Microsoft is as frugal as Ebenezer Scrooge. It’s a company that buys canned weenies for food, not shrimp. Until last year (1999), even Bill Gates and his second-in-command Steve Ballmer flew coach. (For scheduling reasons, the company purchased its first corporate jet.)

Bucking the trend of most large, wealthy corporations, Microsoft remains in start-up mode where tight budgets are the rule. When you sit back and think about it, this frugality is less surprising and even explain how a company can come to accumulate such great hoards of cash.’

9. ‘Stop’ the ‘mad bureaucracy’ - I have mentioned this before in a post (can’t think of which one though) and it gets reiterated again by Microsoft. As Matt said, ‘The plague of most big companies is bureaucracy and stupid rules. Thielen gives the example of an un-named high-tech company that sent a four-page memo to all of its employees on proper security badge procedure, including infinitesimal details on how and where to wear the badge.

To that, Thielen states, “Does Microsoft manage to avoid this type of inane garbage? By and large, yes.” Unlike most companies, Microsoft actually assumes its employees are smart. Rules at Microsoft are few and far between, and the ones that exist tend to make sense. Having only a few important, logical rules means that employees actually remember and follow them.

Some Sources of Information and further reading:

How to be the next Bill Gates

Former MS employee recalls Bill Gates’ management style

The 12 Simple Secrets of Microsoft Management

Fiedler Model and Level 4 leadership

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