Open Letter To CEOs

My name is Sandy and I am an MBA.  There, I said it. I constantly refer to it and joke about it around here and accept any abuse that might come with it.  After all, when you are in a group of techies, the MBA is the easy target (oh, I bet you've seen the FedEx commercial where they make the crack at the MBA--even I laughed at that one).  So, why would a geek like myself step out of the workforce for two years and pay a ungodly amount of money for tuition to get one of these degrees that can incur ridicule with my former fellow developers?  Easy--I want to be one of you.  I want to be a CEO. 

 

For two years, B-school teaches you how to think like one, analyze like one, lead like one, and even act like one (no Enron jokes, please).  Of course, then you leave b-school and get to Microsoft and you are not CEO.  In fact, Steve Ballmer probably doesn't even have you on his list of potential successors (yet :>).  Still, the skills can come in handy and I certainly have the opportunity to play "armchair CEO", second-guessing moves by the current industry leaders (don't ask what I think of Oracle/PeopleSoft).  Plus, every now and then, someone looks to you for a CEO-like perspective.  That happened recently.  So JD Meier, the PM behind our security and perf/scale releases, has been really excited about the work he has done with the Perf/Scale guide.  He e-mailed me a while back with the following message:

 

Here's the CIO sell:

If the work is highlighted as:

  • Lower TCO. Lower your TCO and meet perf/scale objectives
  • Framework for managing performance. Manage perf/scale as a quality of service attribute
  • Treat software as an engineering discipline. Engineer for performance
  • Mandatory guidance from MS. Every organization writing managed code needs to use the guidance -- it's all the lessons learned from customers in one package.
  • Internal MS software engineering improvements. We're using the guidance internally for our Engineering Excellence efforts
  • Tools integration. We're integrating the guidance w/the tools in VS .NET 2005

 

What would the CEO sell look like?

 

Thanks,

JD

 

That's a great question. You CEOs are all about profits and profits are a simple calculation: revenues minus costs. When I was a management consultant, there were two types of projects we did-- incremental revenue generation (growing existing businesses or creating new businesses) and cost cutting. When it comes to IT, a lot of people assume it is all about the latter and that's certainly the pressure the CIO feels. Recently, a professor at Harvard Business School wrote an article called "IT Doesn't Matter" where he claimed technological capabilities are a commodity and the focus should be on minimizing investments because there is no net gain to a greater investment. This is the typical MBA bull that profs use to get their books to sell (not Wharton profs, of course ;>). It pains me when I hear Bill Gates or Steve Ballmer refer to that remark (which they have both done) because it almost lend credibility to the comment. The ignorance/arrogance of the remark completely ignores the opportunities IT can create. Of course you want to minimize costs and that is the CIO's responsibility (which is why JD's comments above are legit) as it rolls up to you anyway. But I encourage you should to look at how the other term of the equation is affected through enhanced IT presence. An excellent example is Wal-Mart (let's forget about class action suits for a second and think of them as the smart businessmen from Arkansas that they are). They have built huge business based on their ability to leverage technology to implement a stunning supply chain management revolution. Yes it cut costs, but it created an infinite wealth of opportunities to grow into regions that their competitors (like Kmart) couldn't and outsell the competition in areas where they shared location. Wal-Mart has built the ability and infrastructure (business and technical ) to grow at whatever rate they want. Rather than rest on their laurels or believe that "IT Doesn't Matter", they are looking for the next investment--which now looks like RFID. If they sidestep the controversy, this could be huge. But regardless of whether RFID succeeds, the point is that they are constantly looking for the way to make themselves more effective through technology. Commodity? I don't think so. Don't forget--they're not just a Fortune 500 company, they're a "Fortune 1" company.

 

David Trowbridge and the guys working on the Integration Patterns stuff have been doing a great job modeling the connection between business imperatives and corresponding technological investments.In the next drop of Integration Patterns (due in the next few weeks), he even gives a sample scenario that describes how a bank might see the opportunity to recognize business trends and use technology to capitalize on those trends and spur growth. He shows the trail, from the CEO to the CIO to the business unit IT owners. What JD's perf & scale guide does is make sure the money spent on those opportunities can be considered an investment instead of just a haphazard bet where any winnings are parlayed into another bet. Here, let me simplify. Does this sound familiar: "hey, we've got a great idea--let's see if customers will like it. OK, they like it, great. Let's just keep building on top of the original pilot investment rather than building it for the long haul. I don't know if it will keep growing, but we will cross that bridge when we come to it." Admit it--there are a lot of technology deployments out there that just weren't ready for their growth. The best CEOs build their businesses to scale with growing demands from a human and physical resource perspective (it's all you talk about to your Wall Street analysts--growth, growth, growth), but rarely from a technological resource perspective. There is no excuse for that. Build with the dream in mind from the start. Prepare for success!!! When you don't consider performance and scalability as vital to your technological investments, you are guilty of short-sightedness and no board of directors should tolerate that. This isn't about spending tons of cash on the solution--just hold your staff accountable for following principles that make growth as painless as possible. An ounce of prevention (or, in this case, know how) is worth a pound of cure. We invested 1100 pages in providing the guidelines necessary for you to optimize your technological investments and make them capable for growth.

 

Don't worry if your business doesn't grow--you'll be out of a job anyway…

 

{Nine Inch Nails-Downward Spiral}