Sergio Marchionne (CEO Fiat and Chrysler ) management style and CIOs

Image by SOCIALisBETTER via Flickr

“Things don’t have to change the world to be important.”

Steve Jobs (1955 – 2011) co-founder and CEO of Apple

Sergio Marchionne (1952 -) CEO Fiat and Chrysler

Today’s article is the eleventh 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, 7^th CIOs and the ideal management style, 8^th Louis V Gerstner, 9th late Steve Jobs and Tim Cook’s, and Richard Branson), analysing current and past leaders to ascertain how senior management including  Chief Information Officer’s (CIOs) can learn better management by applying the management practices of leadership, practiced by these leaders.

Sergio Marchionne (mar-key-OWN-ee) also won the 2011 Deming Cup (and other accolades) and regular readers will know that I am a big Deming fan and as such, I really wanted to find out more….

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

The Management Style

Sergio Marchionne is a chartered accountant and barrister and holds a Bachelor of law (LLB) and MBA. Although he was born in Italy, he emigrated to Canada at 14 and his first job was with Deloitte and Touche. He has a pretty unconventional management style (According to European CEO, “His management style is to manage his companies. Not to control them.”) that he has used with great effect at various companies, in particular to turn around the fortunes at Fiat and Chrysler. According to Money CNN, “The principles of his management style are simple: He values merit over rank, excellence over mediocrity, competition over insularity, and accountability over promises. Marchionne presents himself like a ’60s intellectual from a Fellini movie, with his baggy sweaters, longish hair, and cigarettes. He rations his public appearances and gets movie star treatment wherever he shows up. Marchionne says his job as CEO is not to make business decisions — it is to push managers to be leaders. What other CEO can you think of who likes to characterize himself as a “simple, homeless, ever-wandering metal basher?”

Let’s see what CIOs and general management can learn from this ‘turnaround’ specialist. (In no particular order and a few other sources utilised):

1.When the going gets tough, investment in people always pays:

“We flattened the organization out. We reached out and brought people on the management team who had been buried underneath the classical hierarchy of corporate America,” says Marchionne. “They were given an opportunity to play. These are people who had been two or three layers down from the senior leadership.”-SM- Time Mag –America24

In another article by Money CNN, Sergio said, “The hardest job is getting personalities to mesh. Some people become dysfunctional — their egos become blown out. It is like having an evil spirit in the house.”

According to Money CNN, “Marchionne runs Chrysler with 26 direct reports, an unusually large number, because he believes it flattens the organization and leads to faster decision making. He demands complete openness, fast communication, and accountability. Marchionne arrived at Fiat from outside the auto industry, and doesn’t try to pass himself off as an expert. Instead, as he told the Harvard Business Review in 2008, “A lot of what I do is challenge assumptions — which often looks like you are asking stupid questions.”

In another article by Money CNN, “Marchionne hopes his round-the-clock zeal will become contagious inside the company. For the launch of the first new vehicle of his tenure, the all-new Jeep Grand Cherokee, Marchionne got deeply involved. Instead of laying off workers when the plant was revamped last fall, he kept them working, and they scrubbed the Jefferson North assembly plant in Detroit from top to bottom — it’s most thorough cleaning since it opened in 1991. When Marchionne showed up one Saturday to review their progress, the workers beamed, even more so when President Obama toured the plant a few weeks later and called it “this magnificent factory.”

The sign of a true leader is that he not only inspires and motivates but ensures that he is surrounded by the best talent, especially in the areas where he doesn’t excel. Sergio does this brilliantly by promoting the best talent and allowing them make their own decisions, coupled with clear, achievable targets. As an accountant he knows his figures and utilises that aspect to his advantage. Senior managers need to understand the importance of retaining and investing in people as displayed by Sergio.

2. Constant analysis:

“Once it’s execution, then you’ve got to look into your shorts and you’ve got to say to yourself, Do you actually have–do you–I mean I, as a person, do you have the wherewithal to get this done?”–SM- Time Mag –America24

One of the reasons for Sergio’s success is that he is constantly analysing his businesses to find out how further improvements can be made. He expects his managers to have their finger on the pulse of the business and failure is NOT an option.

3. Spotting opportunities:

According to European CEO, “We spit blood to clean up and restart Fiat. When I took over, there was a smell of death here,” Marchionne has said of the experience.

Marchionne refused to get bogged down in the engineering technicalities of running a car manufacturer. He took a more philosophical approach and modelled sales of the Fiat 500 on the iPod – when it broke into the UK’s top 10 selling vehicles in 2009, it became the car people didn’t think twice about buying. It became the iPod on wheels – practical, stylish and affordable.

Sergio was a big fan of Steve Jobs and used his philosophy with great effect in selling the Fiat 500. The Fiat 500 has not done so well in USA and it remains to be seen whether he can launch more cars akin to the iPod!

Certainly, like Steve Jobs, he needs to create an environment and culture that thrives on spotting opportunities.

4. Improve productivity: –

According to Forbes and Vecchio (Mediobanca analyst) “When Marchionne took over the company, he was literally firing one manager a day but there was a leadership problem and nobody wanted to take hard decisions. The communication from bottom to top in management was slow and wrong. He also changed that,” the analyst added. “He reduced the layers of management and gave his role a more direct view of what the business was doing. And of course his ego is very big and sometimes people who had clashes with him were basically fired. Looking at his style from outside it seems awful but he delivered.”

When profits are dwindling and an organisation is on the brink of producing losses, serious questions have to be asked of its management. Sergio, was quite right to question his management team and change the structure based to a performance related one (Based on meritocracy, as Deming envisaged). Something has to change, as in that situation if nothing changes, the organisation will cease to exist!

5. Success in general may be built on failure:

“I don’t think that people really understand what the implications would have been of a lack of decisiveness at that point in time,” says Marchionne. “It would have been a mess.”(Referring to the purchase of Chrysler) – SM- Time Mag –America24-.

Chrysler was on the verge of bankruptcy and decisions had to be made. Sergio did not shy away from such decisions and followed his instinct, just as Steve Jobs did (Sergio is a fan). The secret is to learn from your mistakes, put them behind you and move on.

6. Competitive advantage:

According to Money CNN, “Marchionne believes his competitive advantage is speed. By wiping out layers of management and making decisions more quickly, he’ll get closer to the market and bring out new models faster than his slower-moving rivals.

“They have access to me 24/7,” he says, and when they call or e-mail, he makes decisions in minutes — or seconds. While traveling, he stays in contact with one of his six BlackBerrys. “BlackBerrys are divine instruments,” he purrs.

Marchionne-style management is not for compromising types. He works all the time, subordinates say, and his wife has left Italy to live separately at their home in Switzerland (they have two boys). “The lifestyle I have today is the most abusive way to achieve a lasting impact,” he concedes.”

Sergio, clearly knows his own competitive advantage and he uses that with great effect for the benefit of his company. While other CEOs may reply to such emails a day or two later, he almost communicates with them in ‘real time.’ This allows the business to be very agile in terms of making crucial decisions. I covered this in my post, Leveraging IT for Competitive Advantage – Myth or Reality?

7. Succession planning and his reputation:

According to Money CNN, “Marchionne is trying to provide some clarity about his retirement plans. He’s announced that he plans to stay until 2015 or 2016, and that his successor will likely come from inside the company.”

Succession planning is paramount for businesses as without ‘nurturing’ successors businesses will run into difficulties and sometimes that can result in situations where the successor ‘fails’ to do his/her job effectively. So, while succession is paramount, so is the need to appoint the ‘most suitable’ candidate.’

8. Focus:

According to Money CNN, “ Marchionne takes an all-but-gleeful delight in reminding audiences about the deficiencies of the Western auto industry. He calls it a business of hand-me-downs and seldom let’s an opportunity go by to remind his audience that the autos have been “rigorously and methodically” destroying billions of dollars in shareholder value. He’s particularly critical of what he calls “M&A sprees” that have made automakers “into rambling ranch houses onto which one room after another was added — with no rational architecture uniting the whole.”

Senior management need to focus on the core activities of a business and shy away from getting involved in M&A’s that do not contribute or add value to that core perspective. In the car industry, failures have occurred when businesses have not produced cars that the public want to buy with features/quality that the public want to buy. Shy away from the 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’.

9. Successful innovation and success in general may be built on failure:

“What I look for in people is the ability to use that space intelligently, not to abuse the freedom,” he says. “It’s to remain absolutely focused on the objective but not to define the method of execution.”-SM – Time Mag –America24-.

Sergio did not have to buy Chrysler but he had the conviction that he could turn it around as he could innovate and launch cars that the public really wanted to buy. Some will inevitably fail but many will be huge successes. Many businesses lack of innovation is due to their fear of failures.

10. Earn respect:

“I told them, I said, ‘You’ve got more than money on the table,'” Marchionne recalls. “‘You’ve got me … You’ve got Fiat.'”–SM- Time Mag –America24

Prior to negotiating with the US administration, Sergio had already turned Fiat around and as such held the respect of Obama and his team and their belief that he could turn the ailing giant around. Unfortunately, such ‘respect’ can only be earned.

11. Quality management:

“Leadership is not a quantitative thing. People either smell it in you or they don’t,” says Marchionne. “People need to trust you that you’re going to pull them out and that they will follow you when you pull them out. If they don’t get that comfort, they’re going to drop you. This is true of organizations. It’s true of countries.”-SM- Time Mag –America24

12. Use numbers to season the points you serve — they’re not the main dish:

According to Money CNN, Sergio said, “I’ve always hit my numbers and will with Chrysler’s five-year profitability plan,” he told a group of dealers in June. “We told people we’d break even in 2010. We made an [operating] profit in the first quarter. It wasn’t a lot of money, but it’s black, and it is from selling cars. From what I can tell, we’ll do significantly better than zero this year.”

Sergio will drop references to his numbers but will not get carried away with them and only uses them ‘sparingly’ so that he can make convincing arguments while avoiding the detail.

13. Create and nurture ‘the correct culture.’ –

In a move that signalled where his heart is, earlier this year Marchionne became CEO of Chrysler Group. His office is on the fourth floor in the engineering department, not the executive penthouse, now sitting empty, where a chairman and three vice chairmen used to rule. “I don’t have an office of the chairman. Which is what used to run this joint,” he says, quickly adding, “with all due respect.”-SM- Time Mag –America24

Sergio wanted to break down the barriers between senior Management and employees and the ideal way to do this was to be closer to the action, i.e. the engineering department where cars were ‘visualised’ and eventually made.

14. Develop a Clear Vision–and Stick to It. –

“There were things that Fiat had, that I had, that if applied here could have pulled this out,” Marchionne explains. “I knew I could help technically. And I had a guy who was willing to fund it.”-SM-

A guy named Obama. (Time Mag –America24)

15. Be ‘shrewd’ and keep the team on its ‘toes.’ –

“It’s pretty intense, because he questions–and again, rightfully so–and there are times when you think you’re so prepared and ready and he’ll bring something completely that you weren’t thinking of,” says Laura Soave Time Mag –America24

This is a trait in common with other leaders, such as Bill Gates. Sergio, surrounds himself with smart people and ensures that when they present their information, they have investigated it thoroughly. Questioning the assumptions that they may have made, ensures that such information is ‘de-risked’ and provides a sound foundation for them to make progress.

More Info:

Fiat’s extreme makeover

Sergio Marchionne’s bad bet at Fiat

Columbia business school address by Sergio Marchionne – Recepient of Deming cup 2011

Columbia Business School’s Deming Centre

W. Edwards Deming Institute®

Related articles

• The Business Council for International Understanding to Honor Sergio Marchionne, Chairman and CEO, Chrysler Group and CEO of Fiat S.p.A, With the 2011 Dwight D. Eisenhower Global Leadership Award (prnewswire.com)
• Fiat heralds Naples plant as best in system (seattletimes.nwsource.com)
• Sergio’s style is working for Fiat-Chrysler (money.cnn.com)
• Fiat heralds Naples plant as best in system (seattlepi.com)
• Fiat heralds Naples plant as best in system (mysanantonio.com)
• Report: Marchionne named Chrysler board chairman (autoblog.com)
• Fiat denies CEO said group could leave Italy (inautonews.com)
• Fiat Chrysler CEO hopes for big 2013 (inautonews.com)
• Sergio Marchionne may move Fiat Industrial HQ in U.S. – again? (inautonews.com)
• Euro crisis too big to plan for, Marchionne says (inautonews.com)

Richard Branson’s (CEO Virgin) management style and CIOs

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“You don’t learn to walk by following rules. You learn by doing, and by falling over.”

Richard Branson, Entrepreneur and businessman (1950-)

Today’s article is the tenth 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, 7^th CIOs and the ideal management style, 8^th Louis V Gerstner and the late Steve Jobs and Tim Cook’s, analysing current and past leaders to ascertain how senior management including  Chief Information Officer’s (CIOs) can learn better management by applying the management practices of leadership, practiced by these leaders.

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

The Management Style

Richard Branson started his working life in the 60’s by starting a magazine called, ‘Student’ and has never looked back. He is an entrepreneur that defies the usual rules of business. He sold his record label and company and started Virgin Atlantic defying convention and established business practices as he not only had no experience of the airline industry but was also stepping into a hugely competitive marketplace. He also took on the might of British airways when he claimed that his business had been the victim of a ‘dirty tricks’ campaign. In both cases, he proved that he could ‘win’ and has since gone from strength to strength.

Let’s see what CIOs and general management can learn from this icon of modern business. (In no particular order and a few other sources utilised):

1. Succession planning and his reputation: RB – “The company must be set up so it can continue without me.””

Richard Branson has created autonomous companies under the Virgin umbrella, precisely so that these companies can operate without him. Succession planning has been ‘built in’ to the very core of Virgin. As such, it is important for CIOs to have succession planning in order that the business has continuity in the unfortunate event of a CIO not being able to provide management.

2. Spotting opportunities: RB – “If something is a good idea, consider it, then work out how to make it happen.”

As someone who has created 200 plus companies, 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.

3. Focus: RB – “Whatever you sell, first identify your market.”

Richard Branson has always identified markets where he can add value. That has often happened in an already crowded marketplace, with existing competitors. The secret to his success is that he enters these markets and creates and delivers products, better than his rivals, usually through value for money and a better customer experience.

CIOs 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’.

4. Talent acquisition: RB – “Employees think for themselves. They have good ideas to listen to. What is the point of hiring bright people if you don’t apply their talent?

Richard Branson believes in empowering his employees to make the decisions and to make it happen.

A CIO needs to trust their gut instinct and allow his/her staff to get the job done and to believe in their capabilities. 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.

5. Handling barriers and roadblocks: RB – “My interest in life comes from setting myself huge, apparently unachievable, challenges and trying to rise above them”

It is hard to stop someone who knows how to tackle barriers and roadblocks. CIOs need to know when to intervene. For example, in many cases that could mean stopping projects altogether to take stock of current situations or to change the direction. Create challenges for your employees and set them targets that ‘stretch’ their capabilities.

6. Successful innovation: RB -. Pioneer, don’t follow the leader, Drive for change  

CIOs need to think how they can do their jobs differently to provide competitive advantage for their companies. As IT becomes standardised across many industries, it will become harder to differentiate the IT offering. Look harder, competitive advantage is still achievable through innovative uses of IT. The question is whether you as the leader can locate and exploit it?

Virgin has proved that such success is achievable. Many businesses lack of innovation is due to their fear of failures.

7. Earn respect: RB – “Having a personality of caring about people is important. You can’t be a good leader unless you generally like people. That is how you bring out the best in them.”

CIOs need to care more about their staff and have to understand and overcome any difficulties that they face in their everyday jobs. Caring managers will always be able to deliver better results.

8. Family commitment: RB – “Divide your private life from your work life. The break down in family live has played a big role in lack of social cohesion and skills.”

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.

9. Learning: RB – “People don’t leave their jobs through lack of pay – they leave because they aren’t valued. Many companies leave people in boxes; encourage them to be adaptable and innovative.”

All great leaders have made it a habit to constantly learn. RB constantly interacts with his employees and is always open to suggestions on how to improve the business or to welcome ideas about new business.

10. Business reputation: RB – ‘ Detached from values, money may indeed be the root of all evil, but linked effectively to social purpose; it can be the root of opportunity.

Richard Branson believes in the power of money to achieve a better world and he constantly strives for that through his Virgin unite charity. As he became involved with the airline industry, he started to look into ways of offsetting the carbon footprint of Virgin through the usage of eco-friendly fuels etc. Companies’ need to support the eco system that they operate in.

CIOs need to understand that IT systems can enhance and assist companies to become better corporate citizens and need to look for these opportunities

11. Follow your instinct: RB – ‘Never let facts get in the way of a good idea. If something is what you really want to do, just do it. Whatever your goal is you will never succeed unless you let go of your fears. It’s easy to give up when things are hard but we have to keep chasing dreams and our goals; once we decide to do something, we should never look back, never regret it. I rely on my gut instinct more than thick reports.”

CIOs need to listen to their inner voice and recommend changes accordingly.

12. Create and nurture ‘the correct culture.’ – RB-“Staff first, then customers and shareholders, Shape the business around the people. Having a personality of caring about people is important. You can’t be a good leader unless you generally like people. That is how you bring out the best in them. For the people who work for you or with you, you must lavish praise on them at all times,” Branson says. “If a flower is watered, it flourishes. If not, it shrivels up and dies. People don’t need to be told where they’ve slipped up or made a mess of something.”

13. Develop a Clear Vision–and Stick to It. – RB – Around the world we’re looking at taking the brand into a number of different industries. Our criterion is, will it fulfil the Virgin yardstick of being good value for the money? Will it enhance the brand by bringing great quality? Will we have fun doing it and can we make it profitable? If those criteria work, then we’ll seriously look at a new industry.”

Above all, you want to create something you are proud of…. That has always been my philosophy of business. I can honestly say that I have never gone into any business purely to make money. If that is the sole motive, then I believe you are better off doing nothing

14. Relax and feel at home – RB –“Work should not be a chore and should be fun. You want to have fun at home; why shouldn’t you have fun at work?”

CIOs often forget to create a culture of fun within their department. This results in a high turnover of staff. Create strategies such as allowing staff to spend a percentage of their time on projects that they want to do. The more staff enjoy work, the more productive they will become.

15. ‘Image’ is everything. – RB – “Outstanding brands are built around great people who deliver consistently great customer service every day.”

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

16. Employees’ performance: RB – “As much as you need a strong personality to build a business from scratch, you also must understand the art of delegation. I have to be good at helping people run the individual businesses, and I have to be willing to step back.”

Branson hires the best and brightest people that he can and then allows them to have a stake in the ownership of that business. CIOs need to become better at delegating tasks, trusting employees to get the job done.

17. Earn respect by ‘listening’: RB – “You learn more by listening to other people.”

18. How do you run this company? RB – “I’ve had to create companies that I believe in 100%. These are companies I feel will make a genuine difference. Then I have to be willing to find the time myself to talk about them, promote them and market them. I don’t want to spend my life doing something that I’m not proud of.”

19. Time Management: Richard Branson spends an equal third of his time on trouble shooting his businesses, new projects (business/charity) and on promoting and marketing his businesses while creating time for family and vacations.

More:

Lesson #1: Be A Good Leader

Richard Branson and the Virgin group of companies in 2004

Leadership by IBEC.IE

Management style of Richard Branson

The importance of being Richard Branson

Michael Walenius blog – The leadership style of Richard Branson

Time – Many times a virgin

Time Video – 10 questions for Sir Richard Branson

Time – How to raise a billionaire

Time – Q&A – Virgin founder, Richard Branson

15 small business lessons from Richard Branson

Five secrets to business success by Richard Branson

Richard Branson as a leader

Business book notes – Richard Branson – Screw it let’s do it

Richard Branson’s, Screw it, let’s do it (Review)

Related articles

• Richard Branson vs. Steve Jobs (empwaynek.wordpress.com)
• Re-encountering Richard Branson, now a carbon warrior (blogs.telegraph.co.uk)
• Richard Branson Unveils The Virgin Galactic Gateway To Space In New Mexico (businessinsider.com)
• Richard Branson: ‘Saving the world’ is good business (telegraph.co.uk)
• Does big pharma need entrepreneurial leadership? (forbes.com)
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Steve Jobs (Chairman Apple) and Tim Cook’s (CEO Apple) management style and CIOs

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UPDATED: 08/10/11 – This post is dedicated to one of my heroes and role models, Steve Jobs, 1955-2011, Thanks for the inspiration. May God bless you.

In February 2010, I posted the blogpost – Steve Jobs (CEO Apple) management style and CIOs that is currently my most successful blogpost. This post attracts so many people that the search, ‘apple management style’ will return this article as the number one post. That’s without any adwords!

With the arrival of Tim Cook as Apple’s new CEO, a lot has been written comparing the two. I actually debated about writing an article on Tim Cook’s management style as well and spent the last two week’s debating the direction to take. In the end, I decided that it would be best for me to re post the original blogpost in its entirety. That decision was made because so much has been written about Tim Cook (both in the past and currently) that it would be better to leave all my readers with some appropriate links to get an idea of Tim Cook’s management style.

The most interesting part from my point of view was that I found older articles, in many cases, better than the current articles as they were quite speculative and gave solid reasons for why Tim Cook should be chosen as Apple’s next CEO. In contrast, the current articles do not have to speculate anymore and as such just wrote about Apple’s new CEO supported by content mostly from a few years ago. Anyway, below is the full text of my previous blogpost (Just after the links), Steve Jobs (CEO Apple) management style and CIOs:

Tim Cook: my first-person impression of Apple’s new CEO by TUAW
Described as “relentless”, the New York Times profiles Tim Cook
The genius behind Steve – Could operations whiz Tim Cook run the company someday? by CNN
Tim Cook’s Challenge: Sorting Out Apple’s Chinese Supply Chain by Forbes
‘Operations Guy’ Tim Cook Gets Chance to Shine At Apple by CIO.com

This article is an article in a series of articles where I will analyse 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. I have broken down Steve Job’s style into two distinct pieces. The management style and the presentation style.

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

The Management Style

In an interview with Fortune, Steve Job’s (SJ) opened up about his management Style (In no particular order and a few other sources utilised):

1. SWOT analysis: As soon as you join/start a company as a CIO, 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.

2. 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 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.

3. Improve productivity: – SJ – “We figure out what we want. So you can’t go out and ask people, you know, what the next big [thing.] There’s a great quote by Henry Ford, right? He said, ‘If I’d have asked my customers what they wanted, they would have told me “A faster horse.”

As a CIO, we need to ask ourselves, what can we do that will improve our customers or our own productivity? That could entail listening to your customers, horizon scanning or simply taking action on something that you feel would help you, your team/and/or customers.

4. Business/IT Strategy: 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!

5. Competitive advantage: SJ – “It is the intimate interaction between the operating system and the hardware that allows us to do that. That allows us to innovate at a much faster rate than if we had to wait for Microsoft, like Dell and HP and everybody else does.”

CIOs need to ask themselves how they can help the business through leveraging IT to create competitive advantage? I covered this a few weeks ago, in my post, Leveraging IT for Competitive Advantage – Myth or Reality?. Sometimes, it makes sense not to embrace open platforms, as Apple has created a significant competitive advantage, by keeping it’s hardware/software systems closed. CIOs need to make such decisions cautiously.

6. Succession planning and his reputation: SJ – “My job is to make the whole executive team good enough to be successors, so that’s what I try to do. My job is to not be easy on people. My job is to make them better. My job is to pull things together from different parts of the company and clear the ways and get the resources for the key projects.”

CIOs need to be facilitators and to bring people together working towards a common goal. It is also important to have succession planning in order that the business has continuity in the unfortunate event of a CIO not being able to provide management.

7. 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 CIO 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’.

8. Talent acquisition: “They have to be really smart. But the real issue for me is, Are they going to fall in love with Apple?”

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.

9. 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 CIO and the entire IT department 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.

10. 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.”

CIOs need to know when to intervene. For example, in many cases that could mean stopping projects altogether to take stock of current situations or to change the direction. There is no shame in that as the project has to deliver the project’s core objective.

11. 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.”

CIOs need to help the businesses by utilising IT to create opportunities in attracting additional customers. They need to ask themselves, “How can we assist in taking the business to the consumer”?

12. 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. CIOs 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.

13. 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.

14. Earn respect: Steve Jobs can be a hard boss to work with but Jobs’ employees remain devoted. That’s because his autocracy is balanced by his famous charisma — he can make the task of designing a power supply feel like a mission from God. CIOs need to command respect from their employees and that is something that has to be earned!

I want to conclude this part by finishing off with a quote that shows us that even with his god like innovative powers, Steve Jobs remains human. “Steve proves that it’s OK to be an asshole,” says Guy Kawasaki, Apple’s former chief evangelist. “I can’t relate to the way he does things, but it’s not his problem. It’s mine. He just has a different OS.”

As Geoffrey Moore, author of Crossing the Chasm said. “He’s at the absolute epicentre digitisation of life. He’s totally in the zone.”

The Presentation Style

For the second part, I am reproducing an article written by Carmine Gallo in BusinessWeek for his new book, The Presentation Secrets of Steve Jobs: How to Be Insanely Great in Front of Any Audience. For this book he watched hours of Jobs’ keynotes. Here he identifies the five elements of every presentation by the Apple CEO. CIOs can improve their presentations by using these five elements.

1. A headline. Steve Jobs positions every product with a headline that fits well within a 140-character Twitter post. For example, Jobs described the MacBook Air as “the world’s thinnest notebook.” That phrase appeared on his presentation slides, the Apple Web site, and Apple’s press releases at the same time. What is the one thing you want people to know about your product? This headline must be consistent in all of your marketing and presentation material.

2. A villain. In every classic story, the hero fights the villain. In 1984, the villain, according to Apple, was IBM (IBM). Before Jobs introduced the famous 1984 television ad to the Apple sales team for the first time, he told a story of how IBM was bent on dominating the computer industry. “IBM wants it all and is aiming its guns on its last obstacle to industry control: Apple.” Today, the “villain” in Apple’s narrative is played by Microsoft (MSFT). One can argue that the popular “I’m a Mac” television ads are hero/villain vignettes. This idea of conquering a shared enemy is a powerful motivator and turns customers into evangelists.

3. A simple slide. Apple products are easy to use because of the elimination of clutter. The same approach applies to the slides in a Steve Jobs presentation. They are strikingly simple, visual, and yes, devoid of bullet points. Pictures are dominant. When Jobs introduced the MacBook Air, no words could replace a photo of a hand pulling the notebook computer out of an interoffice manila envelope. Think about it this way—the average PowerPoint slide has 40 words. In some presentations, Steve Jobs has a total of seven words in 10 slides. And why are you cluttering up your slides with too many words?

4. A demo. Neuroscientists have discovered that the brain gets bored easily. Steve Jobs doesn’t give you time to lose interest. Ten minutes into a presentation he’s often demonstrating a new product or feature and having fun doing it. When he introduced the iPhone at Macworld 2007, Jobs demonstrated how Google Maps (GOOG) worked on the device. He pulled up a list of Starbucks (SBUX) stores in the local area and said, “Let’s call one.” When someone answered, Jobs said: “I’d like to order 4,000 lattes to go, please. No, just kidding.”

5. A holy smokes moment. Every Steve Jobs presentation has one moment that neuroscientists call an “emotionally charged event.” The emotionally charged event is the equivalent of a mental post-it note that tells the brain, Remember this! For example, at Macworld 2007, Jobs could have opened the presentation by telling the audience that Apple was unveiling a new mobile phone that also played music, games, and video. Instead he built up the drama. “Today, we are introducing three revolutionary products. The first one is a widescreen iPod with touch controls. The second is a revolutionary mobile phone. And the third is a breakthrough Internet communications device…an iPod, a phone, an Internet communicator…an iPod, a phone, are you getting it? These are not three devices. This is one device!” The audience erupted in cheers because it was so unexpected, and very entertaining. By the way, the holy smokes moment on Sept. 9 had nothing to do with a product. It was Steve Jobs himself appearing onstage for the first time after undergoing a liver transplant.

One more thing…sell dreams. Charismatic speakers like Steve Jobs are driven by a nearly messianic zeal to create new experiences. When he launched the iPod in 2001, Jobs said, “In our own small way we’re going to make the world a better place.” Where most people saw the iPod as a music player, Jobs recognized its potential as a tool to enrich people’s lives. Cultivate a sense of mission. Passion, emotion, and enthusiasm are grossly underestimated ingredients in professional business communications, and yet, passion and emotion will motivate others. Steve Jobs once said that his goal was not to die the richest man in the cemetery. It was to go to bed at night thinking that he and his team had done something wonderful. Do something wonderful. Make your brand stand for something meaningful.

For more of Job’s techniques, flip through this slide show. Then catch a video interview with Carmine Gallo about how he researched his book.

Related articles

• Tim Cook’s first anti-Jobsian move (9to5mac.com)
• The post-Jobs era: Tim Cook brings philanthropy back to Apple (arstechnica.com)
• Why Apple’s shares rose after Steve Jobs resigned (asymco.com)
• Tim Cook replaces Steve Jobs at Apple (bizjournals.com)
• Apple Gives New CEO Tim Cook 1M Shares For Staying 10 Years (pocketnow.com)
• Steve Jobs Resigns as CEO (technopaarth.wordpress.com)
• Weekly Poll: Do You Think Tim Cook Will Be a Good CEO? (mac.appstorm.net)
• Tim Cook: New Apple CEO and Most Powerful Gay in America (sfist.com)
• Tim Cook announces new charity matching service for Apple employees (9to5mac.com)
• Why Tim Cook is the Right Man to Follow Steve Jobs [Editorial] (techie-buzz.com)
• The Four to Five Year Tenure for CIOs (billives.typepad.com)
• AFL-CIO Opposes Steve Jobs’s Reelection To Disney Board (cultofmac.com)
• What is your management style? (blackbeltbusiness.wordpress.com)
• Apps Vs. The Browser (video.forbes.com)
• Global CIO: Apple Faces Mounting Pressure On Steve Jobs Succession Plan (informationweek.com)
• Steve Jobs Is Re-Elected to Disney’s Board Despite Opposition (cultofmac.com)
• Quotations from Chairman Steve by network world – What is the “aggressive” style in which Steve Jobs holds his meetings?
• Leadership vs. Management, or what Steve Jobs, Marines, and Navy SEALs have in common

The 6 Box Model – An Eco System for sustainable performance

“Thinking is the hardest work there is, which is probably the reason why so few engage in it.”

Henry Ford, industrialist, inventor (1863-1947)

There are so many new management techniques and tools published every year that it is often hard to select one that will actually work within an organisation. I recently came across the 6 box model (Created by Vlatka Hlupic, University of Westminister) and thought that it was a model that could easily be used by organisations that wanted to improve and sustain performance. Today’s business eco system is very different to the one that was prevalent, even quite recently as the early 80’s and 90’s. Professor Vlatka highlights that quite well, in the following slide:

Hlupic Slide

The 6 Box model identifies the main six key performance drivers required by organisations and how they are interlinked and rely on each other to deliver sustainable performance. Usually, when I come across business tools and techniques, the accompanying websites fail to deliver content that supports them. I was therefore quite pleasantly surprised by the 6 box model website that is a mine of information and contains a rich resource of content ranging from an article by professor Vlatka featured in Harvard Business Review that includes marked productivity improvement at both CSC and ANADIGICS. Please also view video on by Marcus Buckingham on ‘strengths’.

6BoxModel

Increasingly, Social Media has been used quite successfully by organisations to tap this resource already found within organisations and I covered this in my blog post, revised recently, ‘Organisations “Don’t get” social media’  . ‘Hlupic points to the example of HCL Technology, a software consultancy in India which developed its own Facebook-style application and used it to create a new business strategy. “Originally, 300 managers would put their strategy ideas to the CEO but with the social media application, they could put their ideas for new strategies to everyone in the global business, so 8,000 people could potentially comment. Everyone could contribute to the planning and everyone could really align themselves with the strategy and live and breath it,” she says. This all happened mid-recession and in the four years since, 70 per cent of all major deals closed by HCL were won against the big four global IT players, the number of customers has grown five-fold and employee attrition is down to 50 per cent. Revenues have also tripled over a four-year period and operating income has also tripled.’

6BoxModelCategories

I would like to conclude this article by requesting readers to read the article that I wrote in 2009 titled, ‘Can IT Management failure be caused by a deadly disease? Part II’  that discussed ‘Dr. Deming – The 5 Deadly Diseases 1984’ as that also discussed and emphasised the importance of employees and as the great man said,

“Unemployment is not inevitable but of bad management”- Dr Edward W Deming.

‘You’ The Brand and ‘Social Media.’

Image by Intersection Consulting via Flickr

“You can easily judge the character of a man by how he treats those who can do nothing for him.”

James D. Miles (1830 – 1914) Steamboat Captain in the Northwest

Some of you may remember, the television shows of the 80’s where TV series/serials, used to start with, ‘Previously on xyx.’I felt a bit nostalgic today, so I will start the same way. Previously on my blog, I have written about Social Media (SM) in various contexts. I wrote about the effect of SM on a friend’s daughter – The ugly side of social media, the conundrum facing CIOs – The Social Networking dilemma and the CIO, a quick primer on SM – Social Media Primer – Succeed by using LinkedIn and blogs, Toyota and its failure to use SM – How Toyota became the werewolf and the three step process to embrace SM: Organisations “Don’t get” social media (UPDATED, RECOMMENDED READING FOR THIS POST, with ALL NEW SM monitoring tools for both personal and business use). It is becoming evident though that some organisations have become adept at SM, as witnessed by Ford’s recent Ford Explorer, campaign. “We couldn’t think of launching a vehicle today without launching it early using social media,”Jim Farley, Ford’s Vice President for Global Marketing – Courtesy of Social Media Explorer.

Senior management need to understand the business and how IT can be utilised to provide competitive advantage – Leveraging IT for Competitive Advantage – Myth or Reality? The problem these days is that many CEOs start working at new employer’s without taking the time and effort to understand and appreciate the business and its culture. Without understanding fully, their business, there is no way for them to realise the potential within their existing or future procured IT systems. In addition, many businesses still have their IT chief’s reporting to CFOs. Without board level representation, IT cannot deliver any benefits to the bottom line. Within that context, Terry Leahy fully understood the impact of IT and allowed his CIO, Philip Clarke to analyse and innovate. In effect, Philip Clarke, successfully created, ‘Philip Clarke, the brand.’ Can anyone create a successful brand, using the Internet and Social Media? The answer has to be a resounding ‘Yes’. I will now outline the steps. The secret to leveraging the success of SM is to integrate, disseminate and monitor SM (automate as much of this as possible, especially if you are building your personal brand – due to time constraints).

Integration: If you are thinking of setting up a new business or personal brand, Google Apps could be the ideal platform for you. I covered this previously, Google Apps – The myth, hype and reality. Google Apps Premiere edition was recently named as  Google Apps for Business and now incorporates all the FREE apps that used to be available to personal Google/GMAIL account holders, such as my favourites, Google URL shortener and Alerts. Regardless, of whether you are a small business or corporate, the website needs to provide analytics to ascertain demographic analysis, page views, referrals (Which sites are referring your site) and statistics and words used for searches conducted, using tools such as Google Analytics. The website also needs a blog feature (Or if you are building your personal brand, enable a personal blog using WordPress/Blogger (Free)). The blog needs to auto connect with SM to deliver posts (Such as, Twitter, Facebook, Yahoo, MSN and YouTube) automatically.

Dissemination: A decision has to be made on which SM will be most effective in disseminating information (News/blogposts/articles) to your target audience. For example, with the launch of the Ford Explorer, Ford decided to use Facebook.  Appropriate profiles for various SM (Facebook, LinkedIn, MySpace etc) need to be created. There is plenty of information available on the Internet, to help in creating these profiles but the rule of thumb is that all of your SM profiles, need to be as similar to each other as possible, across all SM. Again, automate as much of this as possible, (especially if you are building your personal brand – due to time constraints)

Monitor: Once SM has been integrated and dissemination profiles/channels are completed start monitor ing‘key people and blogs and setup appropriate RSS feeds’ for content/people that your business needs ‘to follow’ in order to keep abreast of trends in your field. Monitoring also needs to be setup for adverse comments, as the case with Toyota (See above) highlights. As SmartPhones are prevalent now, appropriate phone apps need to be setup to provide the ability to monitor, regardless of location.

Finally, I wanted to leave you with some Twitter cheat sheets that also include other SM tools etc as well (Courtesy of the following):

Geneabloggers.com-Twitter-Cheat-Sheet

@gminks of Adventures in Corporate Education’s Cheat sheet

The Social Media guide.com’s Cheat sheet

The public you.com and Rich Sauser’s Cheat sheet

Related articles

• Social media case study: Tesco’s social media vacuum (freshnetworks.com)
• Social media cheat sheet 2011 (drewsmarketingminute.com)
• Social Media Articles Every Small Business Should Read (newspapergrl.com)
• Tools for your social media listening dashboard [del.icio.us] (openforum.com)
• 6 Useful Social Media Monitoring Tools (shoutmeloud.com)
• Popular social media FAQs answered (questprblog.com)
• The rise and fall of social media projects (customerthink.com)
• How Ford gets more sales with Social Media
• A good example of how to use Social Media – Ford creates a buzz page for Ford Explorer, integrating feeds from Social Media across the web

Louis V Gerstner (CEO IBM 1993-2002) management style and CIOs

Image by Chemical Heritage Foundation via Flickr

“Watch the turtle. He only moves forward by sticking his neck out.”

Louis V Gerstner, Jr (1942 – ) IBM CEO 1993-2002

Sign in Louis Gerstner’s office:

THERE ARE FOUR KINDS OF PEOPLE:

THOSE WHO MAKE THINGS HAPPEN

THOSE TO WHOM THINGS HAPPEN

THOSE WHO WATCH THINGS HAPPEN

THOSE WHO DON’T EVEN KNOW THINGS ARE HAPPENING

Today’s article is the eighth 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, 7^th CIOs and the ideal management style), 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.

I don’t usually read a book and write about it but I really liked Louis Gerstner’s (LG) very own style of writing and the way that he turned around IBM. In 1993, IBM was losing market share and perhaps on the verge of bankruptcy. Louis Gerstner accepted the job and walked into this situation without really knowing whether he could revive IBM to its glory days.

This series is about leadership and this is the first time I am moving away from offering my thoughts on how CIOs (and others) can apply these leadership practices within their own businesses. The main reasoning is that, I will from now on leave it to my readers to apply what they have learnt from my blog posts. I am increasingly conscious that my readership now envelops many disparate disciplines and I am grateful for that. It has always been my intention that I disseminate my knowledge to others who may benefit as well. After all, knowledge taken to the grave is knowledge lost!

For the full version, please read the book, Who says Elephants can’t dance – Inside IBM’s historic turnaround by Louis V Gerstner. I am also grateful to Harper Collins as I have used excerpts from the book itself.

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

The Management Style

Louis Gerstner started his working in life with McKinsey & Company in 1965, joined American Express as their Head of Travel related Services Group in 1977 and accepted the CEO’s position of RJR Nabisco in 1989. Let’s see what CIOs and general management can learn from this icon of modern business and technology. (In no particular order):

1. Success in general may be built on failure:

As LG started his new job at IBM, he met with the Corporate Management Board (Top 50 executives of IBM) and told them that he had not looked for the job and took it reluctantly as he thought that the responsibility was important to the country’s competitiveness and health. He then went on to outline his expectations:

i.            Eliminate bureaucracy by decentralising wherever possible while ensuring the right balance with central strategy and common customer focus.

ii.            Benchmarking costs against those of competitors and then achieving best in class status.

iii.            Layoffs maybe necessary (Let’s not kid ourselves)

iv.            IBM management wanted to breakup IBM into smaller autonomous businesses. LG said, “Maybe that is the right thing to do, but maybe not. We certainly want decentralised, market-driven decision making. But is there not so offer comprehensive solutions, a continuum of support? Can’t we do that and also sell individual products?”

v.            About morale, he said, “I want can-do people looking for short term victories and long term excitement.” He also told the audience that it would be his priority to utilise internal talent rather than bringing in outsiders.

2. How did he want to run IBM? LG -.

• “I manage by principle, not procedure.
• The marketplace dictates everything we should do.
• I’m a big believer in quality, strong competitive strategies and plans, teamwork, payoff for performance and ethical responsibility.
• I look for people who look to solve problems and help colleagues.
• I sack politicians’.
• I am heavily involved in strategy; the rest is yours to implement. Just keep me informed in an informal way. Don’t hide bad information – I hate surprises. Don’t try to blow things by me. Solve problems laterally; don’t keep bringing them up the line.
• Move fast. If we make mistakes, let them be because we are too fast rather than too slow.
• Hierarchy means very little to me. Let’s put together in meetings the people who can help solve the problem, regardless of position. Reduce committees and meetings to a minimum. No committee decision making. Let’s have lots of candid, straightforward communications.
• I don’t completely understand the technology. I’ll need to learn it, but don’t expect me to master it. The unit leaders must be the translators into business terms for me.“I would say a few things. First, don’t be afraid to make mistakes. That’s how you learn, so I believe a lot in trio al and error and course corrections. Often companies are unwilling to admit when they’ve made a mistake. We tend to question things more in our business.”

                                              

3.        SWOT analysis: LG pointed out five ninety day priorities on joining IBM and they were:

I.            Stop the bleeding of cash as IBM is running out of money.

II.            Ensure that IBM is profitable by 1994 (LG joined IBM in April 1993).

III.            Develop and implement a customer strategy for the next two years (93,94) that indicated to the customers that IBM had returned and was there to serve them.

IV.            Complete the ‘right sizing’ of IBM.

V.            Create ‘an intermediate-term business strategy.

4.        Constant analysis: With regards to mainframe pricing, LG was convinced that the reason IBM was losing out to competitors was that IBM had the pricing strategy all wrong, so he reversed it with ‘an aggressive price reduction. In addition at a conference attended by approx 175 CIOs and after listening to them during the conference, LG laid out his expectations:

I.            IBM priorities would be redefined, starting with the customer.

II.            IBM laboratories would be allowed to do what they wanted to do and would deliver open, distributed, user based solutions.

III.            IBM would be easier to work with, would recommit to quality and re-establish its leadership position.

IV.            IBM would work for the customer and deliver the performance the customer wanted.

5.        Improve productivity: – As LG moved forward with re-inventing IBM, he took the following measures to improve productivity:

• All of IBM would stay together as one company and not converted into autonomous units.
• IBM economic model would be altered, such as expenses as IBM were spending 42 cents to produce $1 of revenue while its competitors were spending only 32 cents..
• Business re-engineering would be undertaken. For example processes and systems would be reviewed as internally IBM had 128 CIOs!
• Underproductive assets would be sold to generate much needed cash.

6.        Business reputation and brand: IBM had never had a true Head of marketing and just like the processes and the 128 CIO scenario, marketing was controlled by countries and business units etc. That resulted in a totally disjointed marketing campaign. The new Head of marketing decided to consolidate all of IBM’s advertising relationships into a single ad agency. This spawned the “Solutions for a Small planet” and was followed by the coining of the term, “e-business.”

7.        Rating of employees’ performance: – In the past, I have reviewed many CEO’s management style but Eric Schmidt’s and Louis Gerstner’s style is the closest fit to Deming’s ‘Annual rate of performance’ that I have yet come across.

“This was all about pay for performance, not loyalty or tenure. It was all about differentiation: Differentiate our overall pay based on the marketplace; differentiate our increases based on individual performance and pay in the marketplace; differentiate our bonuses based on business performance and individual contributions; and differentiate our stock-option awards based on the critical skills of the individual and our risk of loss to competition.”

8.       Spotting opportunities: While looking for opportunities, LG met the Head of ISSC (IBM Subsidiary), Dennie Welsh. The opportunity that Dennie had spotted would change IBM forever. “He told me that his vision of a services company was not one that did just IBM product maintenance and strung together computer codes for customers, he envisioned a company that would literally take over and act on behalf of the customers in all aspects of information technology-from building systems to defining architectures to actually managing the computers and running them for the customers. My mind was afire. To be truly successful, we would have to do things that would shake the place to its roots. For example, the services unit would need to be able to recommend the products of Microsoft, HP, Sun and all other major IBM competitors if that, in fact, was the best solution for the customer. Of course, we would have to maintain and service these products as well.”

9.        Create and nurture ‘the correct culture.’ – Watson, Sr had created the original culture of IBM but over the years, IBM personnel had moved away from the original ethos of that culture and had started to interpret it quite differently to how it was originally intended. LG made it an imperative to change the IBM culture that was a better reflection and fit for the changing times. The original culture hinged around:

• Excellence in everything we do. – This became an obsession with perfection. The culture that developed threatened to halt IBM due to checks, approvals and validation meant that decision making just ground to a halt.
• Superior customer service.- This translated into “servicing IBM machines on customers’ premises”, and as a result the customer’s real needs were usually not entertained.
• Respect for the individual. – This meant that employees expected their entitlements regardless of performance. This meant that in many instances the best people were not getting what they deserved.

10.     Develop a Clear Vision–and Stick to It. – LG “I was always amazed at how many executives thought that “vision” was the same as “strategy.” Vision statements are for the most part aspirational, and they play a role in creating commitment and excitement among an institution’s employees. Good strategies start with massive amounts of quantitative analysis –hard, difficult analysis that is blended with wisdom, insight, and risk taking.”

11.      Business/IT Strategy/principles: LG- “I am struck by how much of the culture change of the following ten years they describe”

LG outlined eight principles that were to envelop the business strategy and underpinned the new IBM culture.

1)        The marketplace is the driving force behind everything that we do.

2)       At our core, we are a technology company with an overriding commitment to quality.

3)       Our primary measures of success are customer satisfaction and shareholder value.

4)       We operate as an entrepreneurial organisation with a  minimum of bureaucracy and a never-ending focus on productivity.

5)       We never lose sight of our strategic vision.

6)       We think and act with a sense of urgency.

7)       Outstanding, dedicated people make it all happen, particularly when they work together as a team.

8)       We are sensitive to the needs of all employees and to the communities in which we operate.

12.     Be ‘shrewd’ and keep the team on its ‘toes.’ – LG – “We’re getting our butts kicked in the marketplace. People are taking our business away. So I want us to start kicking some butts-namely, of our competitors. This is not a game we’re playing. We have got to start getting out in the marketplace and hitting back hard. I can assure you, our competitors are focused maniacally on these charts, and they talk us down constantly. For example, this from Larry Ellison (CEO Oracle): “IBM? We don’t even think about those guys anymore. They’re not dead, but they’re irrelevant.”

13.     Hire ‘Action’ oriented employees. – LG was once asked, “What do you really want people to do?” He answered, “Win, execute and team.”

• “WIN:    It was vital that all the IBMers understand that business is a competitive activity. In the new IBM there would be no place for anyone who lacked zeal for the contest.”
• “EXECUTE:         No more studying things to death. In the new IBM, successful people would commit to getting things done – fast and effectively.”
• “TEAM: This was a commitment to acting as one IBM, plain and simple.”

14.     Focus: LG – “History shows that truly great and successful companies go through constant and sometimes difficult self-renewal of the base business. They don’t jump into new pools where they have no sense of the depth or temperature of the water.”

15.     Quality management: LG ”But alas, too often the executive does not understand that people do what you inspect, not what you expect.”

16.     Succession planning and his reputation: LG – “When IBM’s Board of Director’s considered who would succeed me, passion was high on their list of necessary attributes. Sam Palmisano (Current IBM CEO), my successor, is an extraordinary executive – a man of many talents. However, he would never have had my recommendation, despite these many talents, if he didn’t have a deep passion for IBM, for what it stands for, for what it can be, for what it can do.”

Related Articles

• 13 Wall Street Titans Who Are Members Of Augusta National Golf Club (businessinsider.com)
• CIOs and the ideal management style (mubbisherahmed.wordpress.com)
• Who Says Elephants Can’t Dance? (administration21.wordpress.com)
• IBM’s Sam Palmisano: A super second act (tech.fortune.cnn.com)
• Finding the Money – Be Smarter like IBM (blogs.forbes.com)
• IBM rides ‘third supercycle of growth’ (go.theregister.com)
• What’s So Hard About Being a Great Leader? (newcommbiz.com)
• Sizing Up IBM Race (online.wsj.com)
• IBM: Our appliance servers smoke Ellison’s ‘phony baloney’ (go.theregister.com)
• The Unintended Consequences of Reforming Government (ritholtz.com)

CIOs and the ideal management style

Image via Wikipedia

“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.’

———————————————————————————————————————————————

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)

Eric Schmidt (Ex CEO and current Chairman – Google) management style and CIO

Image via CrunchBase

“If you’re not making mistakes, then you’re not doing anything.”

John Wooden (1910 – 2010) Hall of Fame basketball coach of UCLA

Eric Schmidt (1955 – ) Google CEO and Chairman from 4^th April 2011 onwards

Today’s article is the sixth 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), 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 Google, Microsoft Googles Apple in 2011, Google Apps – The myth, hype and reality, Weather bulletin – Google Cloud and icy Microsoft downpour and Used iphone under a palm tree where I met android and formed a symbian relationship with a blackberry

Eric Schmidt arrived at Google to help Google’s inexperienced founders; Sergey Brin and Larry Page. He has led Google to become a globally recognised company with approx 24000 employees. Recently, he has stepped down to become the chairman and to pass the leadership to Larry Page (on 4^th April 2011). Over the years, he has mentored the young founders and believes that the time is now right for them to take the helm. For his efforts, he leaves with a golden shake of $100 million in equity and shares worth 9.1% of Google stock.

“As a CEO, Schmidt is more inclined to provoke than proclaim. “Google is run by its culture and not by me”, said Schmidt in 2009. In Google, when a key executive decision is reached, all interested parties are invited to the decision making process and are encouraged to share their opinions. Schmidt’s job is to oversee the whole procedure and make timely decisions. This bottoms-up way of decision making usually leads to a better buy in and a better decision.  Google allows employees to spend 20% of time on self-directed projects. To closely connect to Google’s frontline innovators, each week Schmidt and his senior associates spend up to six hours in dialogue with team members from across Google, who believe their projects have great potential. This unique management style has hatched a series of great products like Gmail and Google News.” Courtesy Vivian’s Tech Blog

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 Eric Schmidt’s management style? Let’s investigate while allowing you to decide.  (In no particular order and a few other sources utilised):

1. How do you run this company? – ES “It’s run in a strange way. We have a normal hierarchical structure. The company is organized ‘bottoms up’ from the standpoint of product creativity and ‘tops down’ from running the quarter and the financials and so forth. We encourage dissent, we encourage large group conversation, we encourage there to be somebody who’s opposed to the decision, and we work very, very hard to be not hierarchical in the way that decisions are made. Often if we can get a decision, we get the best decision if we have two decision makers, not once. We never make decisions in private; we always do them right in front of everybody.” Courtesy Marketplace

2. When the going gets tough, investment in people always pays: ES – “Getting the most out of knowledge workers will be the key to business success for the next quarter century. Here’s how we do it at Google.

At Google, we think business guru Peter Drucker well understood how to manage the new breed of “knowledge workers.” After all, Drucker invented the term in 1959. He says knowledge workers believe they are paid to be effective, not to work 9 to 5, and that smart businesses will “strip away everything that gets in their knowledge workers’ way.” Those that succeed will attract the best performers, securing “the single biggest factor for competitive advantage in the next 25 years.

At Google, we seek that advantage. The ongoing debate about whether big corporations are mismanaging knowledge workers is one we take very seriously, because those who don’t get it right will be gone. We’ve drawn on good ideas we’ve seen elsewhere and come up with a few of our own. What follows are ten key principles we use to make knowledge workers most effective. As in most technology companies, many of our employees are engineers, so we will focus on that particular group, but many of the policies apply to all sorts of knowledge workers.” – Courtesy 1000 Ventures

For more, read – Google’s ten golden rules for getting the most out of knowledge workers.

“When Eric joined Novell, the company’s future was very much in doubt. He correctly recognized a culture of fear that pervaded the organization. Bright engineers with revolutionary ideas were reluctant to voice them for fear of being fired. The engineers however, complained vociferously amongst themselves leading to a culture of corporate cynicism. Recognizing this pervasive bellyaching, Eric asked two engineers he met on the company shuttle, to give him the names of the smartest
people they knew in the company. Eric met with each of them, and asked them in turn to identify the 10 smartest people they knew. In a few weeks, Eric had a list of 100 engineers he considered critical to Novell’s future. He met with each of them personally, encouraging them to take chances and follow their instincts. He removed the possibility of reprisals by their managers for voicing their opinions. This inspired the engineers and focused their efforts, resulting in innovative and improved products. These changes helped Novell transform itself from a loss of $78
million to a gain of $102 million”. – Courtesy Scribd.com

One person alone cannot handle everything. The secret is to surround yourself with employees that are smarter than yourself. These smart people will challenge organisations and force them to think differently. I covered this, under mobility of management when I covered; can IT Management failure be caused by a deadly disease? Part II. CIOs 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.

3. Business/IT Strategy: – “At Google, Eric has stated the company’s goal as “…Organizing the world’s information making it universally accessible and useful”. An engineer working to index billions of web pages can easily identify with this laudable goal. As a practical matter the goal of making information universally accessible is a more
meaningful goal for the engineer, interested in making his mark on society, rather than a mundane goal of increasing Google’s revenues by $300 million dollars. Eric considers this transfer of ownership to be so important that while at Novell he created a quarterly in-house radio show modeled after NPR’s “Car Talk”. He even made tapes available for in-car listening.” – Courtesy Scribd.com

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!

4. Rating of employees’ performance: – In the past, I have reviewed many CEO’s management style but Eric Schmidt’s style is the closest fit to Deming’s ‘Annual rate of performance’ that I have yet come across.

“Eric management style is to let the team’s progress be reviewed by individuals the team respects. In most companies there exist a few individuals that are universally respected or at least more respected than everyone else.
These individuals have a way of articulating principles and have very good memories. Since they are considered impartial, teams are more open to receive feedback or decisions even if the decision goes against them. – Courtesy Scribd.com

5. Earn respect by ‘listening’: – ES “Listening to each other is core to our culture, and we don’t listen to each other just because we’re all so smart. We listen because everyone has good ideas, and because it’s a great way to show respect. And any company, at any point in its history, can start listening more.” Courtesy Andrew McAfee

6. Competitive advantage: – This is an area of great interest, as currently, Google is the undisputed king of search but Microsoft’sa Bing is knocking on its doors. So, for the moment Google is able to keep its competitive advantage. The worry for Google has been the defection of key employees (who view Facebook as ‘cool and the place to be’) to companies such as Facebook. Social Media is an area where Google doesn’t really have a strong foothold and that is worrying for them while in the mobile arena, Android is not a huge money earner (albeit, earnings are approx $6 per user per year) when compared to Apple IOS. Google is in a battle with Apple, Microsoft and Facebook and it is ambiguous which markets Google ultimately wants to compete within.

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?

7. Talent acquisition – Hire ‘Action’ oriented employees: “I might have been mistaken, actually. Having your name and picture up on that big screen at End of Quarter may not be the biggest incentive. The thing that drives the right behavior at Google, more than anything else, more than all the other things combined, is gratitude. You can’t help but want to do your absolute best for Google; you feel like you owe it to them for taking such incredibly good care of you.” Source unknown, courtesy Oliver Thylmann

Google actively recruits recent Ph.D.’s and Ph.D. candidates. All 1,900 Google employees are researchers and developers in addition to their regular duties. Where other companies will keep their research departments and core businesses separate, Google places all their Ph.D.’s in the rank and file of the company. Workers at Google enjoy a company devoted to benefits (Stross, 2004). They also enjoy an informal company culture where employees have access to gyms, massages, pool and ping-pong tables, well stocked snack rooms and other recreational amenities (Google Culture, 2009). Courtesy Marty Andrade

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.

Eric Schmidt has 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 –  “innovation is the key to Google’s success, everything Schmidt does revolves around creating more innovation. Without it, Schmidt believes there is nothing to prevent another company from overtaking Google as the king of digital information.  Innovation is systematically encouraged at Google at all levels throughout the organization, including management. At Google, management follows the “70/20/10″ rule where seventy percent of their time is spent on core business projects, twenty percent is spent on projects related to the core business and ten percent is spent on projects unrelated to the core business (Battelle, 2005). Schmidt, in order to remain true to the 70/20/10 rule, actually divides these projects into different rooms and tracks his time spent in each of the rooms.” Courtesy Marty Andrade

For More Info:

The Daily Telegraph’s articles on Eric Schmidt

Google’s greatest innovation may be its management practice

Android OS is profitable, might generate $10 billion per year

Google CEO, Eric Schmidt: “We don’t have a 5 year plan.”

The New York Times: Eric E Schmidt

Google CEO, Eric Schmidt, will not talk about “Private conversations” with Apple about becoming CEO

Related Articles

• Eric Schmidt Caught By Surprise At Rate Of Mobile Growth (kwiksocial.com)
• “Google Gives Eric Schmidt $100 Million As Larry Page Becomes CEO” and related posts (pulse2.com)
• CHART OF THE DAY: Google’s Stock Under Eric Schmidt (GOOG) (businessinsider.com)
• Eric Schmidt Out, Larry Page In As Google CEO (search.slashdot.org)
• Why Eric Schmidt Left As CEO of Google? (tech.slashdot.org)
• Eric Schmidt Steps Down As Google CEO; Larry Page New Google CEO (techie-buzz.com)
• Larry Page is the new Google CEO, replaces Eric Schmidt (globalthoughtz.com)
• Google Awards $100 Million To Outgoing CEO Eric Schmidt (huffingtonpost.com)
• Eric Schmidt: CEO shuffle “nothing to with competitors” or China (slashgear.com)
• Mobile Growing Faster Than Predicted, says Google’s Schmidt (searchenginewatch.com)

Microsoft Googles Apple in 2011

Image via Wikipedia

“It’s hard to beat a person who never gives up.”

Babe Ruth (1895 – 1948)

The quote above is apt when you are up against a person but what happens when you encounter organisations that are trying to outdo each other? 2010 was certainly interesting in that respect. Hunter Richard’s blog post on Microsoft (MS) is “All In” for the Cloud, but What About Dynamics? outlined Microsoft’s dilemma that is not limited to just MS Dynamics.

Microsoft is still trying its best to innovate as its key visionaries, such as Ray Ozzie (View Ray Ozzies’s – Dawn of a new day OR BBC’s summary) were falling by the wayside. At face value, it could be argued that MS is reinventing itself, as it has done so quite successfully in the past (WordPerfect vs. MS Word, Netscape vs. Explorer,……list continues),  but this time around, there is a caveat. Is MS actually listening to its own visionaries and customers?

MS knows that history is repeating itself once again as it has done so many times before and MS is trying its best to change and adapt, as it knows very well that if it doesn’t, it could wither away and die, just as it had slain Netscape and WordPerfect in the past. The secret to Apple’s and Google’s success is that they listen to us, the customer. They are finely attuned to what, we, the consumer want and need, just as my previous blog post Leveraging IT for competitive advantage, has alluded to. Secondly, this battle is not just about the hardware and software anymore, as all three companies go after our hard earned cash. Even Apple overtook MS, in terms of revenue this year.

Microsoft is a giant in the software world and one of the penalties it is paying for its enormous success is that:

1.        Its products are now so diverse that only IT experts can make any sense of them. Need convincing. Ask any non IT personnel to visit any Microsoft site and ask them to explain a particular Microsoft site’s products and what they can actually do for them.

2.        Sheer confusion. As a business owner, for my Microsoft IT system, where do I start? Microsoft Licensing and its payment model – Again, this is an open challenge to Microsoft. How many Microsoft employees can explain Microsoft licensing without referring to a price model manual? The correct answer should be at least half its workforce. Why? You cannot sell what you don’t understand (Microsoft have actually done remarkably well then!). Ah, would an employee be able to explain it all in a pub, though?

3. Microsoft’s entire business model is built on desktop/laptop client installation and as long as it has enough businesses that utilise that legacy because they have no other option, for the short term, it faces no financial problem. Office365 is a step in the right direction but unlike Google, MS products were never designed to ‘run in the cloud’ whereas as Rajen Sheth, Google’s senior product manager for Google Apps said, “It will be tough to build up the cloud expertise that’s been built into Google’s DNA since day one.”

So, where does that leave Google, Microsoft and Apple? They should all acknowledge their key strengths, concentrate and focus on those and licence each other’s products. That can be hard to acknowledge by ‘massive’ organisations such as these three but the reality is that sometimes other organisations just do it better than you can.

Let’s take a brief trip down memory lane. Novell was the King of network software, had the opportunity to licence its NDS to MS for its Active Directory, failed to strike an agreement and MS ended up killing its business because they could do it better. So, in hindsight, an effective licensing agreement by Novell would have been better. Then, we have Apple. MS Office is one of the best sold software for its desktop/laptop equivalent and Apple decided years ago that it would not concentrate its efforts on a ‘war’ to decide who could create a better office type software suite. Google became the king of search and MS decided to ‘take it on.’

I would argue that all of these companies need to innovate more. Apple and Google innovate, quite successfully. I would argue though that as innovation is stifled at MS, MS have not released a single innovative product in 201o. MS did finally catch up with Apple (iPhone) and Google (Android) with a WM7 marketplace though! We even saw new releases of old software, such as Windows Mobile 7 and for those who want to argue and labour the point, did anyone release anything groundbreaking as Apple’s iPhone equivalent in 2007 or the iPad this year?

Oh and let’s not forget, Office365 still has no marketplace equivalent!

For more:

What is Cloud Computing? Its Pros/Cons and making it work

Microsoft announces Office 365 beta: test new cloud-based Office one year before its launch

Office 365 Beta: a first look

Steve Ballmer speech at UW: “We’re all in” for cloud computing

Microsoft Straightens Out Cloud Strategy — Finally

The 7 sins of Windows Phone 7

Apple iOS vs. Google Android

Top Tech Company of 2010: Apple

Will Google Apps survive Office 365?

The road to Office 365: The future

Office365 vs Google Apps

A guide to Office 365 versions and pricing

Windows Marketplace

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

Used iphone under a palm tree where I met android and formed a symbian relationship with a blackberry

Bill Gates (Chairman Microsoft) management style and CIOs

Choosing technology over customers

Google Apps – The myth, hype and reality.

Cloud based ERP. Fact or fiction?

Weather bulletin – Google Cloud and icy Microsoft downpour

Steve Job’s (CEO Apple) management style and CIOs

Back to basics Enterprise Resource Planning

Search wars – Past, Present and future – Bing, Google or new entrant?

Leveraging IT for Competitive Advantage – Myth or Reality?

Microsoft and Apple Tablets, pens and swords

The wonderful world of FREE Windows 7 applications

Houston, Windows is counting down 10,9,8,7…

The future is bright but is it mobile?

Related Articles

• 10 for 2010: Microsoft stories that mattered (betanews.com)
• The 2010 year-end review of Microsoft (seattletimes.nwsource.com)
• Microsoft After Ray Ozzie May Be a Little Less Magical (dailyfinance.com)
• 2010 a big year for new products from Microsoft (seattletimes.nwsource.com)
• Ray Ozzie, Microsoft’s Chief Software Architect, to Step Down (dailyfinance.com)

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

Image via Wikipedia

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”

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