Barack Obama’s (44th President of USA) management style

May 1, 2012 2 Comments

Barack Obama

Barack Obama (Photo credit: jamesomalley)

“We didn’t come from wealthy families. When we graduated from college and law school, we had a mountain of debt. When we married, we got poor together”

(Telling students at the University of North Carolina that he and first lady Michelle Obama had “been in your shoes” and didn’t pay off their student loans until eight years ago).

PRESIDENT BARACK OBAMA, 44th and current President of USA

Today’s article is the twelfth in a series of articles (1st Steve Jobs, 2nd Michael Dell, 3rd Warren Buffet, 4th Bill Gates, 5th Larry Ellison, 6th Eric Schmidt, 7th CIOs and the ideal management style, 8th Louis V Gerstner, 9th late Steve Jobs and Tim Cook’s, 10th  Richard Branson and Sergio Marchionne), 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.

I must admit this is the first time that I decided to delve into the management style of a national country leader. During the last American election I was quite impressed by the way that Obama fought the election on several fronts, including his great oratory skills, defeating Hillary Clinton, using social media and the Internet to raise funds for his campaign, his views on America’s role in the world and Health care to name a few. Now that we are approx. half way through his Presidency, I wanted to find out whether there was a consensus on his Presidency, i.e was he perceived to be good, bad or indeed great. I personally thought that he could go down in the annals of history as not only the first Black President of America but as one of the greatest.

As always, my personal view is that he needs to communicate to the American public his strategy in more detail, coupled with his intentions for the future, along with his successes. For a President who successfully helped solve the American car crisis and introduced America’s first ever Health legislation, he certainly doesn’t seem to be communicating that to the public effectively enough (Maybe he needs to blow his trumpet on his small and large successes to date). He seems to forget that his stakeholders’ are the public and that he needs to communicate with them the reasons why he is the best candidate to secure America’s future prospects.

My writing style had to change as I was not just analysing a sitting President but was also writing about the management style of a manager who is managing an economy and not just an organisation. In comparison terms, that is akin to comparing, well, therein lies the problem, one cannot compare any organisation to a huge country such as USA. This is a country and it is managed by a bond between both the public and private sector.

Frank Burke, American Thinker said, “The President’s inner circle has, for the most part, consisted of Chicago machine politicians. The appointment of numerous Czars, whose functions are neither well-articulated nor understood, has led to confusion on all levels and among the public”.

This seems to be a view shared by David Brooks, NY Times, “Obama has been a delegator and a convener. He sets the agenda, sketches broad policy outlines and then summons some Congressional chairmen to dominate the substance. This has been the approach with the stimulus package, the health care law, the Waxman-Markey energy bill, the Dodd-Frank financial reform bill and, so far, the Biden commission on the budget.

As president, Obama has proved to be a very good Senate majority leader — convening committees to do the work and intervening at the end.

All his life, Obama has worked in non-hierarchical institutions — community groups, universities, legislatures — so maybe it is natural that he has a non-hierarchical style. He tends to see issues from several vantage points at once, so maybe it is natural that he favours a process that involves negotiating and fudging between different points of view.

Still, I would never have predicted he would be this sort of leader. I thought he would get into trouble via excessive self-confidence. Obama’s actual governing style emphasizes delegation and occasional passivity. Being led by Barack Obama is like being trumpeted into battle by Miles Davis. He makes you want to sit down and discern.

But this is who Obama is, and he’s not going to change, no matter how many liberals plead for him to start acting like Howard Dean”.

This comment from Larry Summers, former Treasury Secretary and former adviser to President Obama provides a unique insight into his management style (Courtesy of Dave Schuler, The Glittering Eye),”If you wrote Barack Obama a memo before the meeting, it is a virtual certainty that he will have read it. If you seek to explain the memo you wrote to him during the meeting, he will cut you off, and he will be irritated. If he, as the leader of the meeting, will ask one or two questions to kick the tires, but will basically focus on how whatever subject you’re talking about fits with the broad vision and approaches of his presidency.

He will basically take the attitude if you’re his financial advisor, that if you can’t — it’s up to you to figure out whether preferred stock or subordinated debt is the appropriate financial instrument for your bailout, and that if he doesn’t trust you to figure it out, he’ll get a new financial adviser, but that is not the question on which he is going to spend time”.

Obviously, every President has faced their fair share of exceptional challenges, highlighted again, the need for direct communication as Lurita Doan, Townhall said, “Obama exhibited colossal managerial negligence in refusing to communicate directly with BP leadership for almost two months. Then, when this negligence was publicized, Obama opened communications and extorted the arbitrary sum of $20 billion dollars to cover liabilities. Twenty billion dollars, without full knowledge of all the facts, without the benefit of a full investigation of the causes and without a final solution for the problem, under the control of one of Obama’s Czars just looks like a slush fund”.

NEIL KING JR. and JONATHAN WEISMAN, Wall Street Journal explains further in great detail how Obama, conducts his office and provides further details into his unique management style, “In a White House ritual new with this administration, the president gathers with his advisers every weekday morning for an Oval Office update and debate on the economy. The breadth of topics is wide, from the underemployed to childhood obesity, and Mr. Obama often dives into the minutiae.

In the sessions, according to those who attend, the president sometimes chafes at his advisers’ limitations, quizzing them on points raised by critics or asking them to do justice to a view other than their own. At times he quotes from letters sent to the White House to counter a stance taken by his team.

A president’s management style can set the tone for an administration. Jimmy Carter was a famed micromanager, often at odds with his own advisers, and he caught a lot of Beltway criticism for his focus on policy details. “If the two risks are operating at too generalized a level or micromanaging, you need to find a balance between the two,” says Peter Orszag, the White House budget director.

In early July, the president ordered a briefing on derivatives — financial contracts that track the return on stocks, bonds, currencies or other benchmarks. Critics had been raising questions about administration proposals to regulate certain derivatives, such as credit-default swaps, which many blame in part for the financial crisis. With advisers gathered round on the Oval Office’s twin sofas, Mr. Obama said he was concerned that the administration hadn’t struck the right balance.

Its proposal called for standard derivatives to be traded on an exchange, bringing them into the open. Critics were calling the proposal too timid because it also would allow “customized” derivatives to continue trading privately. “What is to assure that this won’t drive all derivatives off the exchange?” the president asked, according to Mr. Emanuel.

He says Mr. Obama was frustrated his team wasn’t offering up a full range of views on how to approach derivatives regulation. “Get me some other people’s opinions on this,” Mr. Emanuel recalls the president as saying. “I want more than what’s in this room.”

On July 1, advisers gave Mr. Obama a briefing on “House Prices, Consumer Debt and Consumption.” Among their charts was one showing how homeowners during the boom used the rising value of their houses to borrow more against them. At the end, the president pushed the presentation aside. “Guys, this is great research,” he said, according to Mr. Emanuel. “But you’re telling me that people have been using their houses as ATMs. I could have told you that.”

Letters from constituents appear to play a role in shaping the president’s thinking. Each day, the White House staff combs through mounds of letters and picks 10 for Mr. Obama to read. In May, one from a woman in Georgia caught his eye. She said she had asked a bank to refinance her house, under the administration’s plan to help struggling homeowners, but had been turned down. She mentioned that her “loan-to-value” ratio wasn’t excessive — her mortgage was for no more than 80% of the house’s value.

Mr. Obama scrawled in the margin “Is this how the ratio is supposed to be calculated?” and sent the letter to one of his economists, Mr. Goolsbee, according to a White House adviser”.

The stark contrast between managing organisation’s is made clearer by Steven Cohen, Huffington Post, “Obama relies on a combination of his own intellect, a small circle of trusted advisers and a larger group of outside experts.

Ronald Reagan began the process of deconstructing the federal government’s capacity. This effort to “starve the beast” and destroy federal capacity was reversed during the Clinton era as Vice President Gore led a well-intentioned effort to reinvent government, but the forces of disintegration picked up renewed momentum during the Bush years of 2001-2009. During the Presidency of Bush the latter, federal agencies that needed to build capacity for a new task were required to demonstrate that the capacity could not be found and purchased in the private sector. The underlying assumption of federal management during the Bush Presidency was that government was the enemy and the private sector was the great repository of management competence in America.

The “make or buy decision” requires that every well managed organization constantly ask itself: “Should we do this in-house or should we outsource?” That is a question that should be addressed pragmatically: “what would work best?” Management in the U.S. federal government has the answer provided for them: buying from the private sector is better than making it in the government. In an article I wrote in Public Administration Review in 2001, I argued for what I called “functional matching.” I wrote that some tasks are best performed by government (especially policing), some by non-profits (for example mission-driven health and social welfare programs) and some by private firms (customer driven services and manufacturing).

At the local level, government services are visible and have an immediate impact. While ideology plays a role locally, it doesn’t usually dominate. In New York, the debate over charter schools has an ideological component, but the visibility of education performance measures provides evidence that moves the argument beyond ideology. Local officials are instantly accountable if water is not delivered, waste is not removed, fires are not put out and criminals are not apprehended. In New York City, most social services are now delivered by non-profit organizations under contract to the city’s government. No one thinks about this practice as an ideological privatization strategy. It’s simply the best way to help people in need. As a result of constant pressure to do more with less over the past three decades, New York City government has improved its performance and capacity.

In Washington D.C., symbolism and ideology drive agency management and performance takes a back seat. The story at the federal level is characterized by management incompetence. We have seen it in the Department of Interior during the Gulf oil spill, during the horror show of FEMA during Katrina, and when we analyze the overuse of contractors by an overly-small military presence during the War in Iraq. The lack of concern for capacity and management excellence has driven superb civil servants out of public service, destroyed organizational capability and made it impossible for the government to keep up with a more complicated and technologically based economy. The result has been the type of government performance we have seen in the Gulf of Mexico”.

His desire to formulate effective teams and to achieve the best for his country is highlighted by the article, Inside the Presidents club by NANCY GIBBS; MICHAEL DUFFY (Some excerpts), “There is no conversation so sweet as that of former political enemies,” Harry Truman once observed, and the modern Presidents are living proof. By the time Clinton made peace with Obama, he was also so close to the entire Bush family–vacationing with the father, raising money with the son, even escorting Barbara at Betty Ford’s funeral–that the Texas clan had bestowed a nickname: Brother from Another Mother.

Now in an age of global celebrity, when Presidents live longer and larger than ever, they retain unmatched influence long after they leave office. Plus they’re the only ones who know what the job does to a person.

They called him after he won. “They were all incredibly gracious,” Obama said. “But I think all of them recognized that there’s a certain loneliness to the job … Ultimately, you’re the person who’s going to be making decisions … You can already feel that fact.” He wanted his club initiation to include the entire membership, so he asked Bush to host a luncheon for all four living Presidents in early January. This request caused the Bush White House to gulp hard: Even Carter? aides asked. He has criticized everything we have done for nearly eight years. Yes, Obama said, Carter too”.

I have been reading the Time magazine since a very early age and wanted to conclude with observations from one of the greatest writers for Time (in my opinion), Fareed Zakaria and his article, The Strategist, “In the central battle in the war on terrorism, Obama adopted many of the Bush Administration’s aggressive tactics, used them more aggressively and achieved greater success. Republicans find it difficult to attack Obama credibly on the core issue of fighting America’s enemies because he outflanked them on the right.

When asked to describe the Obama Doctrine, the President has chosen not to respond directly, but he explained that he believes the U.S. must act with other countries. “[Mine is] an American leadership that recognizes the rise of countries like China, India and Brazil. It’s a U.S. leadership that recognizes our limits in terms of resources and capacity,” he told TIME.

A great deal of foreign policy is crisis management. “Stuff happens,” the President said, “and you have to respond.”

The strategy of “rebalancing” might well be the centrepiece of Obama’s foreign policy and what historians will point to when searching for an Obama Doctrine. It is premised on a simple, powerful recognition. The center of global economic power is shifting east. In 10 years, three of the world’s five largest economies will be in Asia: China, Japan and India. The greatest political tensions and struggles might also be in Asia as these countries seek political, cultural and military power as well. If the U.S. is going to be the central global power, it will need to be a Pacific power.

In a speech to the Australian parliament, Obama signaled America’s intent. “The United States is a Pacific power, and we are here to stay,” he said.

Good foreign policy Presidents (like Dwight Eisenhower and George H.W. Bush) managed a complex set of challenges expertly, making few costly errors. Bad ones (like George W. Bush and Lyndon Johnson) made mistakes that cost America in lives, treasure and prestige. But great foreign policy Presidents (like Harry Truman) created enduring structures and relationships that produced lasting peace and prosperity. Obama has been a good foreign policy President; he has the opportunity to become a great one”.

More Info and Reading:

Barack Obama: A Management Appraisal – American Thinker

Convener in Chief – NY Times

The Obama Management Style – The glittering eye

Obama’s Management Style: Bowing and Posturing – Townhall

A President as Micromanager: How Much Detail Is Enough? – WSJ

Changing Obama’s Management Style Alone Will Not Prevent the Next Environmental Catastrophe – Huffington post

Inside the Presidents club by NANCY GIBBS; MICHAEL DUFFY, Time Magazine

The Strategist by Fareed Zakaria, Time Magazine

Related articles

Filed under business, CEO, Leadership, Management, Stakeholder Tagged with , , , , , , , ,

Excelling at Customer Service

February 29, 2012 4 Comments

Customer services

Customer services (Photo credit: gordon2208)

“Excellence is not a skill. It is an attitude.”

Ralph Marston (1907 –  ) Professional Football Player in 1929

“If you want to give a great customer experience you have to align your culture and the way you reward staff. None of our customer facing staff has sales targets or sales bonuses — their rewards and bonuses are based purely on their customer satisfaction scores.”

Anthony Thomson, Chairman, Metro Bank

Quote courtesy of Institute of customer service

Life has a way of taking everything in its stride and I am often compelled to go through the related emotions. Sometimes, I marvel at the way life turns corners and obviously as human beings, we all have this uncanny ability to learn from mistakes and move on by not repeating those same mistakes. We learn, change and adapt.

Organisations are very similar to us (in theory) and are supposed to learn from their mistakes, change processes to reflect that and become ‘the ideal organisation.’ So, I have to ask myself then, ‘Why in today’s day and age, are we still dealing with organisations’ that are failing its customers, in terms of customer service?’

Obviously, during my life, I have had many good experiences of customer services and some pretty dire ones. The reason for writing this blog is that recently, I dealt with three organisations that should have excelled at customer service but in reality, they failed in their promise to provide even the basic levels of customer service. I have debated whether to play the ‘name and shame’ game but that just wouldn’t be me. So, instead, I have decided to write about how to provide excellent customer service.

According to a survey conducted in the U.S. and eleven other countries in 2010, by American Express Global Customer Service Barometer, Americans Will Spend 9% More with Companies That Provide Excellent Service

Although only a little more than a third of Americans (37%) believe that companies have increased their focus on providing quality service:

  • 27% feel businesses have not changed their attitude toward customer service.
  • 28% say that companies are now paying less attention to good service.

So, where do I start?

Let’s start with:

  1. Culture

According to Catherine Lovering, “Make the goal of providing excellent customer service a company-wide commitment. Put a customer-service policy in writing, and post it in a prominent place. Translate customer-service objectives into specific actions for employees to follow, such as: deliver prompt service, offer a polite demeanour, and make product information readily available.”

Inc.com says, “Start by hanging on the wall a set of core values, 10 or fewer principles that include customer service ideals, suggests Susan McCartney, Maggiotto’s colleague at the Buffalo SBDC. “Share them during the training, have employees sign them, and evaluate employees based on the values,” she says. “But don’t call them rules.”

Employee training on customer service precepts should be intensive: written materials, verbal instruction, mentors, and on-the-job demonstrations all ought to be part of the coursework, says McCartney.”

This theme continues in 10 Examples of Shockingly-Excellent Customer Service and  12 ways to dazzle your customers.

  1. Staff morale and motivation

Catherine Lovering says, “Treat your employees well, so they in turn will treat customers well. Employees will bring enthusiasm and a positive attitude to their job when they know they’re appreciated and respected. Recognize employees who continually provide good customer service and praise the entire staff for their efforts. Customer-service work can be emotionally draining unless the company involved is supportive and gains the loyalty of its employees.”

Inc.com says, “Companies renowned for their customer service — the online shoe retailer Zappos, for example — treat employees as they would have their employees treat their customers. “Employees take on more responsibility because they know they are appreciated and an important part of the team,” says the University of Missouri’s Proffer. “People who don’t feel like they’re part of the bigger picture, who feel like a small cog in a big machine, are not willing to go the extra mile.”

Not every business can afford to shower staff with generous pay and benefits, but not every business has to. Small companies, says McCartney, can show “intense interest” in employees, in their welfare, their families, and their future — what McCartney calls the family model. It’s also important to recognize an employee — publicly — for a job well done. Some companies also offer incentives for exceptional customer service, but if you can’t spare the cash, you might throw an office party or offer another token of appreciation. When he was a manager at cable provider Tele-Communications Inc., for instance, Proffer personally washed the cars of notable employees.”

  1. Knowledgeable staff

Staff need to know their products and services and that can only be achieved by a comprehensive induction and training programme for staff that not only includes products and services but also includes an initiation with an organisation’s processes and knowledge of the internal and external network of people who can help resolve issues and problems. A ‘can do attitude’ needs to be instilled in staff right at the outset while empowering customer service staff to engage in activities that resolve the problem while highlighting to management any processes that hinder resolution. That way employees are highlighting processes that hinder the delivery of excellent customer service while improving customer service delivery at the same time.

Inc.com says, “The best salespeople spend 80 percent of their time listening, not talking,” says Marc Willson, a retail and restaurant consultant for the Virginia SBDC network. Ask open-ended questions to elicit a customer’s needs and wants. ”

Further in the article, Proffer offers the The Five A’s. method, “It’s helpful to think of resolving a dispute as a five-step process called the Five A’s: Acknowledge the problem. Apologize, even if you think you’re right. Accept responsibility. Adjust the situation with a negotiation to fix the problem. Assure the customer that you will follow through.”

  1. Well trained staff

Training is paramount and well trained staff needs to help customers resolve their problems regardless of how much time they have spent resolving it (within reason). Many organisations tend to operate their measuring metrics for customer services advisors’ on calls closed rather than calls resolved. Well trained staff will have the ability to resolve calls and close them better than ill trained staff. Staff training should be reviewed periodically and refresher courses offered based around lessons learnt, processes improved and latest innovations in delivering better customer service.

Catherine Lovering in her article on customer service said, “Teach the staff stress-reduction methods and techniques in conflict resolution. Train staff to use language that promotes good customer service. Phrases such as “How can I help,” “I don’t know, but I will find out,” and “I will keep you updated” let customers know that their needs will be met. It also will demonstrate a willingness to find a solution to any problem and a commitment to communicate with the customer. This dedication will go a long way toward defusing dissatisfaction among clientele.”

She further adds, “Train staff to accept responsibility for errors and to apologize to upset customers. Good customer-service representatives must refrain from arguing with an upset customer and instead ask the customer what they can do to solve the problem. Advise employees to speak calmly to customers and to assure them that they’ll do what they can to help. Follow up with a clear resolution to the complaint.”

  1. Empowered staff

Catherine Lovering says, “Empower these staff members to not only deal well with upset customers on an emotional level but also to provide tangible benefits. For example, “Entrepreneur” magazine recommends giving employees the authority to give any dissatisfied customer a 10-percent discount.”

The emphasis should be on, “What can we do that will make the situation better for you? Add the wow factor –“For example, one winner of The WOW! Awards is a restaurant in Leeds called Gueller’s. They keep a range of prescription spectacles, just in case customers forget their own and are having difficulty reading the menu.”

Give them something that will make them feel valuable. That could be a freebie, the ability to resolve their problem, following up the matter on their behalf and make them feel that their concerns have been heard and addressed (or will be addressed)

  1. Customer service, IT systems and process review – Capture, monitor and report

IT systems need to be setup according to effective measurement metrics. For example, it is not good enough to measure “How many calls did an agent take/close today?” An effective metric would be, “How many calls did an agent close today that was satisfactorily resolved for the customer?” Each call should also be followed up by the completion of customer satisfaction surveys and that opportunity utilised for creating other effective metrics and for highlighting process improvements.

Information Technology Infrastructure Library (ITIL) is used extensively within the IT industry and it can be modified to deliver excellent customer service. Karen Francis of Macanta consulting says, “My opinion is that we shouldn’t be too precious about what we use as long as it works for us. If an organisation is already using ITIL for the IT department and finds that it can be adapted for the non-IT departments, then why not do it.

ITIL may not cover things such as sales and marketing and HR, but if you already have effective and efficient processes for managing faults, problems, changes, inventory, capacity, business continuity, service levels and so on, why not use them for non-IT if they translate well?”

As a fan of Deming, I would like to add Danielle J Baker’s thoughts, “ITIL’s iterative approach and focus on continuous improvement is the basis of IT Service Management as defined by the ITIL set of best practices.

The following needs to be done prior to the installation of any IT system for customer service.

  1. Do we know what processes we have captured in existing systems?
  2. How do we go about capturing processes that are not captured by our existing systems?
  3. What processes can we improve, prior to using IT?

Use new innovative tools for interacting with customers, such as Desk.com (Or similar tool). According to Desk.com website, “Connect to your customers on Facebook and Twitter as easily as on traditional support channels like email, phone and web. Desk.com organizes all of your support in one place so you can respond efficiently wherever your customers reach out.”

One of their client’s, Bonobos said, “I was excited by the look and feel of Desk.com when I saw it. By lunchtime the next day we had switched over entirely.”

  1. Benchmark

As a big fan of benchmarking, I highly recommend benchmarking and covered this in my blog post, IT benchmarking

Catherine Lovering said, “Create customer service benchmarks for employees to meet, and reward the workers who meet and exceed them.”

  1. Customer service and relationship management

Catherine Lovering said, “Communicate with customers so you know what they want. Distribute surveys, request feedback, and make it easy for customers to let you know how they feel about their shopping experience. Add a personal touch to customer communication by answering comment letters with a note of thanks. Keep an eye on the competition to see how they implement customer-service policies, especially if it appears that those services are well-received by customers.”

Inc.com says, “The cost of acquiring a new customer is five times that of retaining an existing one.”

Contact with the organisation should be easy and should include an element of ‘self service’ via social media and an organisation’s own website. That could include, for example, a knowledge base or frequently asked questions (FAQ). This could be done by keeping track of the most common type of service desk requests and enabling access to them via these methods.

In her excellent article, 4 Steps to Overcome Being a Pain in the Ass Call Center that I would recommend reading (All 3 parts), Dr. Jodie Monger says, “According to W. Edwards Deming, the father of the quality evolution, “workforces are only responsible for 15% of mistakes, where the system desired by management is responsible for 85% of the unintended consequences. [1]”  In other words, 85% of a worker’s effectiveness is entirely out of his or her control!   It’s rather unfortunate that it is the 15% that is under workers’ control that call centers tend to focus on through quality monitoring efforts, Voice of the Customer programs, mystery shopping and the like.

A well-designed, well-executed quality program will provide a holistic view of your organization’s strengths and opportunities by answering ALL four of the vital questions:

  1. How are we—as an organization—doing at representing our company to its customers?
  2. What can we—as an organization—do to improve?
  3. How are you—as an individual agent—doing at representing our company to its customers?
  4. What can we—as a management team—do to help you improve?

Note that in accordance with Deming’s philosophy of systems and process management, only one of the four vital questions focuses on the activities of the worker.

What would your answers be?”

On that thought provoking question by Dr Judie Monger, I would like to end this blog and hope that this blog post contributes to even better customer service!

References and further Information:

10 Examples of Shockingly-Excellent Customer Service

12 ways to dazzle your customers

Why is Customer Service Still So Lousy?

Customer service frustration leads to lawsuit

Americans Will Spend 9% More With Companies That Provide Excellent Service

The high price of bad customer service

American Express – A story of customer service gone bad

Create a culture of excellent customer service

Institute of customer service

7 Secrets to Providing Excellent Customer Service

Providing Excellent Customer Service

Tips for excellent customer service

How to provide excellent customer service

How to deliver great customer service

How to provide excellent customer service

Salesforce.com Revolutionizes Customer Service for a Social and Mobile World with Desk.com

desk.com

Using ITIL for Non-IT Purposes

How ITIL Help Desk can help SMBs?

ITIL and Deming

Are you a Pain in the Ass Call Centre?

The Deming Centre for Quality, Productivity, and Competitiveness at Columbia Business School

Related articles

Filed under business, CEO, Communication, Competitive Advantage, Customer Service, Leadership, Management, Risk Management, Social Media Tagged with , , , , , , , , , , , , , ,

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

December 27, 2011 7 Comments

SERGIO MARCHIONNE

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 (1st Steve Jobs, 2nd Michael Dell, 3rd Warren Buffet, 4th Bill Gates, 5th Larry Ellison, 6th Eric Schmidt, 7th CIOs and the ideal management style, 8th 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®

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

October 24, 2011 5 Comments

Industrialist Richard Branson at the Time 100 ...

Image via Wikipedia

“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 (1st Steve Jobs, 2nd Michael Dell, 3rd Warren Buffet, 4th Bill Gates, 5th Larry Ellison, 6th Eric Schmidt, 7th CIOs and the ideal management style, 8th 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)

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

April 19, 2011 5 Comments

IBM Electronic Data Processing Machine (1952)

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 (1st Steve Jobs, 2nd Michael Dell, 3rd Warren Buffet, 4th Bill Gates, 5th Larry Ellison, 6th Eric Schmidt, 7th 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.”

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

November 24, 2010 6 Comments

Oracle logo at the Oracle headquarters.

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

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

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

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

The Management Style

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For More Info:

Oracle – Larry Ellison Interviews by PeopleSoft Planet

Can Oracle survive Larry Ellison

Larry Ellison – The Source of Oracle’s Wisdom

Larry Ellison’s one man show

What Larry Ellison said about Cisco and Corporate Culture<

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

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

About.com –Larry Ellison

Hackers take up Larry Ellison’s challenge

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

Related Articles

Filed under Bill Gates, business, CIO, Competitive Advantage, Data, Data Storage, Enterprise Resource planning (ERP), Infrastructure, IT Management, IT Strategy, Leadership, Microsoft, Mobile Computing, Relational Database, SmartPhones Tagged with , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Can IT Management failure be caused by a deadly disease? Part II

September 25, 2009 14 Comments

W. Edwards Deming

Image via Wikipedia

Dr Deming has always stood out in the crowd for me personally, as he continued to teach in what he had always believed in, even when he was doubted on his own home soil. This has always been a trait of most great leaders and in the true spirit of leadership, the knowledge and conviction he had developed for management was not held back but was applied with tremendous success in Japan. This was enough to create the ripple effect/tipping point for his teachings to be given credence back home in the US and Europe. A testimony to his success is the fact that at Toyota’s headquarters, his framed photograph has an even larger frame than the founder of Toyota, Kiichiro Toyoda.

Dr Deming originally developed, what he considered the five deadly diseases of western management (Two more were subsequently added, excessive medical care costs and excessive legal damage awards, not discussed in this post).

I agree with one of my readers, Thomas Keplar, who posted a comment a few days ago, “Lot of good idea’s in TQM, also a lot of areas that still must be understood that TQM will not provide answers other than as Ishakawa said “unless you have senior
management buy in, do not implement TQM”. It is a well known fact, comprehended by the recent credit crunch, management of the banks and the finance sector, that, businesses do not fail, management fail. As I go through this post, hold these two thoughts, as the importance of these two thoughts will become clarified.

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

The five deadly diseases that cause IT management failure

1. Lack of constancy of purpose

This happens for three reasons. Firstly it happens, where the most senior IT position is a functional Head reporting into a board Director, for example, Head of IT reporting into a Finance Director. In this scenario, senior management, i.e. the CEO and the board, have not been able to communicate well enough to the Finance Director and hence the Head of IT, the business vision and the direction and/or there is a lack of planning for the future. In this situation, the information provided to the Head of IT, is second hand and as the information has been forwarded, the Head of IT, cannot understand the perceptions, background and discussion that may have led to that business vision and direction. This is management failure, in the making, as the board have failed to understand that IT should be represented directly at board level.

Secondly, it can happen where IT is represented directly at board level, the IT Director/CIO does understand the business vision and the direction but the board as a collective have no planning for the future and while they are looking after their, “cash cows”, they do not have the product of tomorrow.

The recent banking crisis is evidence of this happening. Although, explaining it is quite complicated and the way banking in general works reflects that as well, in a nutshell, the banks had, inadvertently, started to finance an expansion of lending by borrowing. IT Management, were not, in my opinion, privy to this information and as evidenced in the 90’s, rogue trader, Nick Leeson’s case (the achievements of these traders and their ability to circumvent systems and procedures).

Thirdly, as future products and innovation is stifled (Both by the business and within IT – Lack of innovation), the roadmap is unclear; processes and IT controls become inadequate and subsequently cause the failure of the business. If on the other hand, the future was planned effectively, for example, it would have been quite clear to the bank that this sort of lending was high risk. As such, it should have been reflected within banking IT systems and as a consequence would have been caught or captured by the intelligence built into the authorisation processes.

2. Emphasis on short-term profits

Again, there are two ways of looking at this. I will not go into the business aspects now but will start to deal with only how the second disease impacts IT departments.

This happens when IT departments either become quite insular or are lead to become insular as despite their attempts to, for example, attract additional funding for programmes of work that work towards longer term planning, they are stifled and are forced to think short term and are constantly, “fire fighting”. Innovation is frowned upon and newer innovative ways of using IT for competitive advantage cannot happen in this kind of environment.

This results in sacrificing the long term growth of the company for short term gains. The emphasis is on short term profits/dividends, no matter what. IT is contributing to anything it can do to raise the value of company stock, in the short term only.

3. Annual rating of performance

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

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

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

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

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

4. Mobility of management

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

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

5. Use of visible figures only

Finally, we arrive at disease number 5! Most IT departments will use figures that are known, for example, service desk figures. This is because most business schools and graduate degrees encourage us to use these figures. The power is in knowing known, unknown and the unknowable.

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

Final thoughts

As always, I look forward to your feedback, and encourage all my readers to post their opinions, both here and within the forums that I am a member of.

Do you have any areas of IT that you would like me to discuss? Please feel free to suggest any future posts by leaving your comments. I am currently compiling a list for future blogs.

For further information:

The W Edwards Deming Institute

Dr. Deming – The 5 Deadly Diseases 1984

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The future Graduate and the IT and Computing skills shortage

August 9, 2009 2 Comments

I have wanted to write this article for a while now.  When I was in university, the IT skills shortage stood at 3 million and the popular IT/Computing magazines were half full of employment adverts. That era has long gone but we, in the UK are still suffering as IT skills shortages reach the highest level in 10 years,  we continue not to learnt from the past and it seems that while we continue to churn out graduates, they seem to lack skills that employers want/need. In addition, the coming generation shun the industry because of a perceived lack of glamour and a reputation for hard work. It doesn’t all end there as recent reports suggest that The UK’s software development industry will suffer the same decline as the country’s manufacturing sector unless action is taken to tackle the skills shortage.

Have we become a nation that is forced to import talent from asia? Do we import talent because its, well, cheaper? I will let you decide.

This topic  is close to my heart as I strongly feel that the UK can become a leader in the IT/Computing arena. Well, if that is the case, how do we go about doing it?

I have realised now the secret of success for new graduates is to locate a degree course that equips them with the theoratical and practical knowledge of performing well in their area of study. Students would do well by using ‘pre-job board’ sites like Careerplayer. This site holds hundreds of videos with real people/graduates in real jobs, talking about their job and what it really entails, good and bad – sharing their honest view of their role. Using a site like Careerplayer will help them to de-select the IT/Computing career paths, if its not for them.

While researching this topic, I found an interesting article by Felix Redmill of Redmill Consultancy . I totally agree with all that has been said by Felix but would want to add by saying that both the government and industry have a role to play to ensure that the UK has a future equipped with suitable graduates, in essence creating a pseudo standard for such degrees with a vision for wider adoption.

I have split IT and Computing into three areas as I feel that these three areas need a slightly different kind of graduate and at least two of these areas have a pseudo standard that should be adopted/followed UK wide. In actual fact, to raise the bar of these degree courses, I would go as far as to say that all IT/Computing/gaming degrees should be validated by the government, with a minimum agreed of modules that are standard within all  three areas identfied below:

1. Information Technology Management

This is an area where government and industry have been brought together by eskills UK to validate IT management courses.  Read the following for more information:

News in Brief for new Information Technology Management for Business (ITMB) Degree course

HP teams with Thames Valley University to address UK Skills Shortage

eskills and IMTB

Universities offering the IMTB degree course (14)

Sample IMTB degree content from University of Manchester

 2. Software Engineering (Programming)

I couldn’t find any resources to indicate even any pseudo standards. This area would be covered well by a region by region basis and associated demand for programmers according to industries served within that region. For example, the universities near the UK’s silicon valley (Reading area) could offer courses on .net, Oracle etc due to local presence of these industry behomeths.

3. Computer Games Progamming

Again for games programming, 81 universities offer courses but only 4 are accredited by Skillset. Again, this suggests a lack of any standard degree for gaming.

It is no wonder, then that when graduates graduate, employers seem bewildered as to the calibre of graduate that they are taking onboard. I have even known of students that have completed their degree courses, employed by employers as programmers only to find that they do not know how to program in the language being used by that employer!

Filed under computing, Graduate IT Recruitment, IT and Computing, skills shortage Tagged with , , , , , , , , , , , , , , , , , , ,