INSIDE THE MIND OF THE HIGHTECH CEO TECH2002

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INSIDE THE MIND OF THE HIGH-TECH CEOTECH2002

• Stewart Cheifet
• COMPUTER CHRONICLES Net Cafe

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OBJECTIVES

• 1. Understand
• CEOs of Major High-Tech Companies
• CEOs of Companies Dependant on High-Tech
• 2. Learn
• How to Be a Better CEO
• How to Deal with CEOs
• 3. Realize
• High-Tech CEOs are People Too
• CEO Mythology is Just That

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THE CEO PERSONALITY

• CEO Drives Company Style Culture
• Apple Jobs vs Sculley vs Amelio vs Jobs
• Where Did CEO Come From?
• Founder
• Sales Marketing
• Engineering
• Finance
• Legal

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THE CEO PERSONALITY

• What is CEOs Agenda?
• First Time CEO
• Merger Survivor
• Designated Adult
• Hired Gun
• Disciplinarian
• Feel Good
• The Company is the CEO !

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AMAZON.COMPURCHASE CIRCLES

• Oracle - Larry Ellison
• Microsoft - Bill Gates
• IBM - Lou Gerstner
• Apple - Steve Jobs

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THE CEO PERSONALITYORACLE LARRY ELLISON

• E-Business or Out of Business Oracles New
  Economy Roadmap
• The Oracle Edge Take No Prisoners Strategy Made
  an 8 Million Software Powerhouse
• Oracle Applications Performance Tuning Handbook

• Implementing Oracle Financial Analyzer by John
  Cunningham
• Oracle Advanced PL/SQL Programming Manual
• The Difference Between God and Larry Ellison
  Inside Oracle

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THE CEO PERSONALITYMICROSOFT BILL GATES

• Yookoso! An Invitation to Contemporary Japanese
• Workbook/Lab Manual to Yookoso Contemporary
  Japanese
• All I Really Need to Know in Business I Learned
  at Microsoft

• The Microsoft Edge Insider Strategies for
  Building Success
• Trust on Trial How the Microsoft Case is
  Reframing Competition
• Proudly Serving My Corporate Master What I
  Learned in Ten Years at Microsoft

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THE CEO PERSONALITYIBM LOU GERSTNER

• Complete Baseball Record Book 2002 Edition
• Learning How to Learn Psychology and
  Spirituality the Sufi Way
• The Quantum Brain The Search for Freedom and the
  Next Generation of Man

• The Constant Gardener
• Time Lord The Creation of Standard Time
• Schaums Guide to Advanced Calculus
• IBM and the Holocaust The Strategic Alliance
  between Nazi Germany and Americas Most Powerful
  Corporation

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THE CEO PERSONALITYAPPLE STEVE JOBS

• Harry Potter and the Goblet of Fire
• Harry Potter and the Chamber of Secrets
• Harry Potter and the Sorcerers Stone

• Harry Potter and the Prisoner of Azkaban
• Harry Potter Quidditch Through the Ages
• The Second Coming of Steve Jobs

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THE CEO PERSONALITY

• Top CEO Drivers
• Survival
• Image of Leadership
• Maintaining Control but Delegating
• Loyalty of Staff
• Growing the Business
• Fending off Competitors
• Dealing with Crises

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THE CEO PERSONALITY

• Top CEO Concerns
• Do I really know whats going on inside my
  company?
• How can I handle high level tasks while still
  staying in touch with the trenches?
• Am I being blindsided what have I forgotten to
  think about?
• How do I stay popular while still pursuing
  long-term goals?

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THE CEO PERSONALITY

• Dominant Characteristic of the CEO?
• Insecure
• Paranoid
• Bi-Polar
• Key Insight into CEO Personality?
• What Sport Did CEO Play?
• What Position Did CEO Play?

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THE CEO PERSONALITY

• Greg Priest Smart Force
• Football Lineman
• Kathy Levinson E-Trade
• Basketball Soccer
• George Bell, Excite_at_Home
• Triathlete
• Tony Ridder Knight-Ridder
• Skier

• Eric Spivey NetCom
• Cross Country Cyclist
• Steve Jurvetson Fisher, Draper, Jurvetson
• Ultimate Frisbee
• Kim Polese Marimba
• Ballet Dancer
• Steve Young Found
• NFL Quarterback

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CEO CHALLENGESTHE VISION

• Vision
• What Does Company Stand For ?
• Profits and What Else?
• How to Maintain Corporate Vision ?
• Need for Constant Strategy Change
• What Business Are We In ?
• Manufacturing, Services, Internet

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CEO CHALLENGESEXECUTING THE VISION

• Execution
• Competitive Strategy
• Offensive vs Defensive
• Innovation vs Barriers
• Control vs Delegation
• The Gurus Say Give it Up
• Authority vs Power
• Ive never had so many bosses!

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CEO CHALLENGESTHE BALANCING ACT

• Vision Execution
• Cannibalization
• Ability to Redefine the Company
• DEC
• IBM
• Apple
• Hewlett Packard
• You may have to eat your own children because if
  you dont reinvent yourself, someone else will
  do it for you.

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CEO CHALLENGESORGANIZATIONAL STRUCTURE

• Regions vs Products
• Proctor Gamble
• Country Units to Business Units
• Big vs Small
• Nokia
• From 28 Product Lines to 4 Product Lines
• If you are in a broad sweep of businesses you
  tend to fall into a mediocre way of running
  things and you dont and cant understand all the
  businesses youre in.

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CEO CHALLENGESORGANIZATIONAL STRUCTURE

• Centralized vs Localized
• Coca Colas New New Coke
• The world was demanding greater flexibility,
  responsiveness and local sensitivity while we
  were further centralizing decision making and
  standardizing our practices.

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CEO CHALLENGESTECHNOLOGY

• Dealing with New Technology
• Era of Frictionless Commerce
• But There is Profit in Friction
• Internet Enabled Direct Distribution
• Hurting Long-Term Partners
• Balance between Sales Force Web Direct
• Encyclopedia Britannica
• Hewlett Packard Dell
• Tower Records

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CEO CHALLENGESMANAGING CHANGE

• The Rate of Change Managing Change
• People Change Jobs Faster
• Customers Change Vendors Faster
• Shareholders Churn Portfolios Faster
• From Linear to Multi-Tasking
• The Car Wash vs the Pit Stop
• Balancing vs Juggling
• Taking Risks without All the Facts

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CEO CHALLENGESMANAGING THE NUMBERS

• The Numbers
• Budget Issues
• Reducing Waste Lowering Costs
• Increasing Revenue
• CRM ERP
• Setting Priorities when Resource Restrained
• Defining Using Appropriate Metrics
• Self Performance Analysis

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CONFLICTING GOALSLONG TERM vs SHORT TERM

• Setting Goals
• Realistic or Rosy
• Look Good Now vs Look Good Later
• The Right Business Model Amid Change
• This is not a place for five-year plans. We
  dont know what will happen 9 months from now.
• You cant have a long-term strategy anymore
  because with it youre going to be confined and
  you wont be able to move fast enough.

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CONFLICTING GOALSLONG TERM vs SHORT TERM

• Major Goal Conflicts
• Shareholder Value vs Other Values
• CEO Looking over Shoulder toward Board
• Differing Stakeholder Interests
• Shareholders, Customers, Employees,
  Partners, Suppliers, Communities
• Need for Speed vs Approval Layers

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CONFLICTING GOALSLONG TERM vs SHORT TERM

• Good Data vs Necessary Speed
• I dont know how were going to make money over
  the Internet but if I wait to have a business
  model in place Ill be the last guy in the
  market.
• Were going to have to make decisions with 75
  of the facts. If you wait for 95 you are going
  to be a follower.

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CONFLICTING GOALSLONG TERM vs SHORT TERM

• Good Data vs Necessary Speed
• The effort to create a 100 accurate solution
  insures that a decision will come too late
  because the market will change by the time youre
  done.
• A bad decision on Monday is better than a good
  decision on Friday.

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GLOBAL PRESSURES

• Opportunity vs Competition
• Opportunity
• Goldman Sachs
• 1980 3 Employees Overseas
• 3 Overseas Offices
• 2000 50 Employees Overseas
• 25 Overseas Offices
• Competition
• Automobiles, Aerospace, Entertainment,
  Electronics
• Internet and Web
• Fed Ex Buys New Planes from Czech Republic

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GLOBAL PRESSURES

• Management Challenges
• Travel
• John D. Rockefeller United States
• Todays CEO U.S., Europe, Asia, Latin America
• Corporate Culture
• Diversity of Talent vs Cohesive Corporate Culture
• Multinational Supervision
• International Team vs Closely Knit Team
• National Differences Management Styles

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GLOBAL PRESSURES

• Globalism vs Localism - Marketing
• Everything is local.
• International mergers are essential.
• Globalism vs Localism - Managing
• We must be flexible enough to move with rapidly
  changing currents.
• We must have strong central controls to be a
  credible global player.

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GLOBAL PRESSURES

• Globalism vs Localism - Customers
• Corporations are moving globally but the
  customer tendency is moving locally.
• Businesses are moving to a global scale while
  customers are moving to a local scale, driven by
  language and culture.
• There is a renaissance of nationalism and
  localism which is growing faster than globalism.

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GLOBAL PRESSURES

• Globalism vs Localism Strategic Location
• Philips
• California Set Top Boxes
• Hong Kong Audio Equipment
• Amsterdam Headquarters
• Sony
• New York Music
• California Movies
• Japan Headquarters

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MERGERS ACQUISITIONS

• The Urge to Merge
• 19 of the 20 Largest Mergers in History Occurred
  in 1998 - 2001
• Can a mere ten billion dollar company survive in
  this decade?
• Daimler Chrysler
• Boeing McDonnell Douglas
• Exxon Mobile

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MERGERS ACQUISITIONS

• Offensive vs Defensive MA
• Most Mergers Fail!
• Distraction of Post Merger Consolidation Issues
  from Main Business Issues
• Aetna
• Tension between Centralized Management and Need
  for Decentralized Specialization
• Cultural Compatibility
• Integration of Systems Philosophies

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MERGERS ACQUISITIONS

• Challenges
• Leverage Size While Maintaining Flexibility and
  Responsiveness
• Like Turning Around an Aircraft Carrier
• How Much is Too Much for a CEO to Effectively
  Manage
• Fear of New Government Regulation
• Burden of Social Responsibility

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MERGERS ACQUISTIONS

• Alternatives to M A
• Organic Growth
• Internal Growth
• Small Acquisitions
• GE
• Merrill Lynch
• Nokia
• Maintains Corporate Culture
• But Slower Growth

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TECHNOLOGY THE INTERNET

• Pace of Technology Change
• Radio 50 Years to Reach 50 Million Users
• TV 40 Years to Reach 50 Million Users
• Web 6 Years to Reach 100 Million Users
• Pace of Corporate Growth in Tech Sector
• Priceline 0 - 500 Million in Two Years!
• Concentration in Retail E-Commerce
• EBay, Amazon Priceline 90 Mkt Value

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TECHNOLOGY THE INTERNET

• Shrinking of Decision Time-Line
• Decide with Limited Data
• Slow-Pitch Softball to Fastball Baseball
• Execution vs Vision
• Different from other Market Changes
• Not New Products but New Way to Buy Same
  Products
• Amazon, Ticketmaster, Priceline

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TECHNOLOGY THE INTERNET

• Click Loyalty
• Harder to Hold on to Customer
• Frictionless Commerce
• More Power to the Customer
• Revenge of Old Economy Dangers
• Complacency
• Role of Internet Inside the Company
• Intranets Extranets

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MANAGING KNOWLEDGECOMMUNICATION

• Controlling Corporate Knowledge
• How to Get the Whole Company Thinking Alike ?
• How to Engage Every Employee ?
• Whispering Down the Lane ?
• Direct vs Indirect Communication
• You have to get every mind into the game.
• Half of the corporate knowledge in this company
  is in the heads of the employees and will go out
  the door with them if they leave.

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MANAGING KNOWLEDGE COMMUNICATION

• Accessing Sharing Corporate Knowledge
• Good Execution Requires Good Information
• How to Get the Data?
• Balanced Communication at Microsoft
• Does this company only have good news, isnt
  there ever any bad news?
• Communicating Change at 3M
• You cant order change. Theres only one of me
  and 75,000 of them.

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THE TECH EFFECTORGANIZATIONAL STRUCTURE

• Getting Horizontal
• Lines Blurring between Producer, Supplier,
  Partner, and Customer
• Broadening Definition of Stakeholder
• Dealing with Multiple Constituencies
• Defining Core Competencies
• Buy or Build
• No company, no matter how successful, can go it
  alone in this new world.

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THE TECH EFFECTORGANIZATIONAL STRUCTURE

• Takes Time to Develop Horizontal Relationships
• Pressure of Quarterly Referendum on CEO
• Managing the Octopus of Partnerships
• Successful Horizontal Partnership
• FedEx and Fujitsu
• PCs Assembled in Fed Ex Memphis Warehouse
• Failed Horizontal Partnership
• Ford and Firestone
• Hedging against Brand Damage from Partner

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THE TECH EFFECT THE CUSTOMER

• How Customers Buy
• Technology The Internet Effect
• Buying On-Line vs In-Store
• What Customers Buy
• Technology - New Products
• Cell Phones, Cable TV, Computers

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THE TECH EFFECT THE CUSTOMER

• We hoped we never heard from the customer
  because if we did, that meant something was
  wrong.
• Old Ford
• Our customers are the most valuable resource of
  knowledge in this company.
• New Ford

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THE TECH EFFECT THE CUSTOMER

• Future Customer Behavior Trends
• Global vs Local
• Pepsi in India and China
• Customer Design Control
• Shipping, Computers, Shoes, Next?
• Internet vs Bricks Mortar
• Physical Assets vs Digital Assets
• If its the Net, then I have too many people and
  too much real estate, but if Im wrong and get
  rid of them, then I lose customers and market
  position.

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MAINTAINING CONTROL

• Wed have a meeting and at the end we would all
  agree to one course of action and then after the
  meeting the managers would ignore it all and do
  their own thing.

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MAINTAINING CONTROL

• Theory Leadership Flows from Bottom Up
• Practice CEO Wants to Lead From Top
• Theory CEO Sets A Strong Compass and Direction
  for the Company
• Practice Business Climate Changes and CEO Must
  Constantly Change Direction

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MAINTAINING CONTROL

• Theory Define Corporate Commitments and Work to
  Develop Staff Confidence and Trust
• Practice Staff Doesnt Trust CEO When Market
  Pressure Makes CEO Tenure Volatile
• Investor Capitalism vs Managerial Capitalism
• Theory CEO Should Share the Risk with the Staff
• Practice Huge CEO Severance Packages Despite
  Corporate Failure
• Mattel, Coca Cola, Procter Gamble

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MAINTAINING CONTROL

• People within the company now have so much data
  and access to data that they can easily challenge
  the CEOs decision.
• If you are taking comfort in the fact that you
  have finally put the right organizational
  structure in place and you are feeling secure,
  you are probably in serious trouble.

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MAINTAINING PERSPECTIVE

• When they put you in the ground and they throw
  dirt on your coffin, there wont be shareholders
  standing around the grave, it will be your
  family. Never forget that.

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INSIDE THE MIND OF THE HIGH-TECH CEOTECH2002

• Stewart Cheifet
• COMPUTER CHRONICLES Net Cafe