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

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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Steve Jobs (Chairman Apple) and Tim Cook’s (CEO Apple) management style and CIOs

Steve Jobs shows off iPhone 4 at the 2010 Worl...

Image via Wikipedia

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

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

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

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

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

This article is an article in a series of articles where I will analyse current and past leaders to ascertain how Chief Information Officer’s (CIOs) can learn better management by applying the management practices of leadership, practiced by these leaders. I have broken down Steve Job’s style into two distinct pieces. The management style and the presentation style.

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

The Management Style

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Presentation Style

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

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

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

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

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

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

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

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

CIOs and the ideal management style

Chief Information Officer United States Army logo

Image via Wikipedia

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

Vincent van Gogh (1853-1890) Dutch painter

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

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

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

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

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

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

2. The job begins:

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

3. Communication and establishing relationships:

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

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

4. Lead and innovate:

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

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

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

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Related Information:

Who is a CIO?

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

Why hire a CIO?

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

Why a CIO is important in an organisation?

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

Roles and Responsibilities of a CIO

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

Criteria for Becoming a CIO

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

For More Info:

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

First 100 Days as CIO

Top 10 guidance tips for new CIOs and IT leaders

London School of Business puts whole MBA course on Facebook

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

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”

21 steps to conquer your market(s)

Environmental Forces - influencing competitive...

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

Facebook’s head of product, Chris Cox

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

19. Annual rating of performance

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

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

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

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

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

20. Mobility of management

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

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

21. Use of visible figures only

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

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

Steve Jobs (CEO Apple) management style and CIOs

Image representing iPhone as depicted in Crunc...

Image via CrunchBase

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

Welcome to my most successful blogpost. This post attracts so many people that the search, ‘apple management style’ will return this article as the number one post. That’s without any adwords. Please read and leave comments.

This article is an article in a series of articles where I will analyse current and past leaders to ascertain how Chief Information Officer’s (CIOs) can learn better management by applying the management practices of leadership, practiced by these leaders. I have broken down Steve Job’s style into two distinct pieces. The management style and the presentation style.

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

The Management Style

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Presentation Style

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

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

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

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

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

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

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

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